 The worst may be over for Britain's factories |
A closely-watched barometer of the British manufacturing economy has revealed the first increase in factory output in nearly two years. The poll, from the Engineering Employers' Federation (EEF), said a positive balance of +2% of firms had reported stronger production in August, up from -1% three months ago.
EEF said a positive balance of engineering firms also reported growth in export orders, helped by a rise in the value of the euro against the pound earlier this year.
"A more favourable currency and some signs of global markets improving are helping manufacturers to reap the rewards of their efforts to improve competitiveness," said EEF chief economist Stephen Radley.
In another positive sign, the EEF poll showed a decline in the pace of job losses, and a drop in the number of firms planning to scale back investment.
Corroboration
The survey's upbeat tone chimes with other recent snapshots of the manufacturing economy.
On Monday, the Chartered Institute of Purchasing and Supply said its manufacturing index rose for the second consecutive month in August, stirring hopes that Britain's embattled factories are finally poised for recovery.
A return to growth would be warmly welcomed by Britain's manufacturers, who, pressured by a strong pound, have spent the last three years alternating between stagnation and outright recession.
However, EEF warned that the recovery remained gradual and uncertain, with some industries - including electrical engineering and transport equipment - still reporting a decline in output.
The regional picture was also patchy, with firms in the south west and north east of England reporting strong production growth, while their counterparts in Scotland and the East of England continued to struggle.
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