Backed by strong performances in European engineering generally
UK mechanical and electronic engineering enjoyed a strong start to the Fourth Quarter according to the Monthly Business Monitor run by the Engineering and Machinery Alliance (EAMA). The volatile monthly numbers show a clear trend over the last 12-24 months of really big gains in prospecting returns and healthy improvements in orders when converted into three-monthly running averages.
Martin Walder, EAMA chairman: “We continue to be bullish about the near-term future. How could we not be with lead indicators like the rate of enquiries so positive over the last two years climbing from -1 and -7 to +26 and +21 for UK and for export business respectively. This month the share of companies reporting declines is now down into single numbers for both measures (UK and export)
“And our European federation, Orgalime, estimates European engineering growth this year at 4% and even slightly higher for mechanical at +5% and next year similar performances with overall growth of around 3.5% and again slightly stronger in the mechanical and electronic sectors across Europe.
“Of course have to prepare. There almost certainly hidden unknowns in the Brexit negotiations, as we’ve seen recently, and likely also in US trade policy that cannot be discounted out of hand. They could have an impact on these forecasts and our expectations for the sectors in the UK.
“However, following the launch of the government’s Industrial Strategy and its aims raising productivity, opening new avenues for people to have better rewarded careers and improved infrastructure we expect an increase in capital investment in 2018. Indeed recent EEF and CBI surveys point to a pick-up in UK factory investment.
“Despite the all too apparent uncertainties, overall confidence across the sector is positive. Companies have decided how to handle current business risks and are satisfied they have the necessary plans. All parties directly involved in Brexit claim to favour a practical deal. This time next year we should know whether that’s a live possibility
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