Bosses predict manufacturing boost

Manufacturers expect an improved outlook this year which should lead to growth in exports and a turnaround in investment, although energy costs are a concern, according to a new report.

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Manufacturers expect an improved outlook in 2014 which should lead to exports growth, a survey of senior executives says

Manufacturers expect an improved outlook this year which should lead to growth in exports and a turnaround in investment, although energy costs are a concern, according to a new report.

A survey of 200 senior executives by EEF, the manufacturers' organisation and Aldermore Bank found a more positive outlook than the muted picture of a year ago, with growth expected in all markets and across all sectors and sizes of companies.

Two fifths of companies said they plan to invest in the UK, with a further fifth saying their investment would be significant.

A third of large firms plan to invest overseas compared with a fifth of smaller companies.

Terry Scuoler, chief executive of the EEF, said: "Manufacturers are telling us they expect to make a greater contribution to growth, investment and jobs this year.

"Innovation, energy and diversifying into new supply chains remain key opportunities but the UK and the eurozone are also looking better.

"However, global uncertainty and rising energy costs pose significant risks and, the challenge for industry and government this year will be to get industry's investment plans over the line."

Mark Stephens, commercial director at Aldermore, added: "2013 has seen a growing sense of cautious optimism emerging amidst signs of a slowly improving economy."

The Institute of Directors (IoD) also published an optimistic report, saying almost nine in 10 of its members expected economic growth to be higher in 2014 than last year.

A survey of more than 800 directors showed that three out of four predicted higher revenue in 2014, and 58% higher profitability.

Chief economist James Sproule said: "Our survey is another sign that the economy is indeed recovering. While the view of the IoD is that economic expansion remains too dependent upon consumer spending, funded in large part by a shrinkage in the savings rate, the fact that 74% of businesses are anticipating higher revenue does point to a welcome broadening of economic growth.

"The key to encouraging longer-term business investment remains a positive business climate, including low taxes, light regulation and a positive outlook on profit and entrepreneurism."

Just under half of directors thought it likely that interest rates will rise this year, with a third saying it was unlikely.