Survey shows we've raised our game in the North

The CBI's quarterly Regional Trends Survey trumpeted good news for the region's manufacturers as the North outperformed the South both in terms of output and employment.

The CBI's quarterly Regional Trends Survey trumpeted good news for the region's manufacturers as the North outperformed the South both in terms of output and employment.

Manufacturing output across the UK as a whole stagnated over the past three months, after an encouraging but patchy upturn during the previous quarter.

However, the survey shows that, across three Northern English regions and in Scotland, output increased in the last three months.

Differences between the North and the South were even more telling for orders. At a national level, the volume of new orders fell, contrary to expectations based on better prospects in the eurozone and hopes for more sustained growth in domestic demand.

The South-West bore the biggest brunt of the decline but volumes of orders also fell in Northern Ireland and the West Midlands. In the northern English regions, and in Wales and Scotland, orders increased.

Looking forward, expectations for export orders are most positive in the North, especially the North-East, compared to predictions of little change or marked decline in the South, most notably the South-West.

These trends translate into deteriorating business sentiment for many regions. However, once again the North-East bucks the trend and demonstrates after Wales the strongest upturns in confidence.

This region has a more dominant manufacturing sector than the national average and therefore the rising costs, associated with higher energy prices and increasing global competition have created a tough environment for some of our region's employers.

It is, therefore, excellent news that the tide has turned and their outlook is positive.

We need to put the figures in perspective, manufacturing will continue to be tough and only the best will succeed. The upbeat expectations for export orders in our region are encouraging but there are serious question marks about the US economy which may mean exports cannot be relied upon to drive a lasting recovery.

However, this survey suggests businesses within our region have raised their game, developed smarter working practices and, therefore, feel in a stronger position to compete.

The North-West and Yorkshire figures unusually indicated that over the past three months there had been a growth in manufacturing employment. Let's hope this trend creeps further North and that manufacturers in the region receive the Christmas present they deserve - more stable costs and increased demand for their product.

Sarah Green is regional director of CBI North-East

 

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