The UK manufacturing sector has seen its largest increase in optimism since 1973 as lockdown measures ease and demand grows.
Vaccine progress increases manufacturers optimism
A recent poll of 288 leading industrial companies (conducted by the CBI) found that business sentiment increased at the quickest rate in the three months up to April 2021 since April 1973. The current success of the COVID-19 vaccination process provides hope that we may return to some normality towards the end of the year. Subsequently, the poll revealed that manufacturers plan on employing staff at the quickest rate since 1974 in the next three months as they prepare for the relaxation of government COVID-19 social distancing measures.
Brexit
At the start of the year, Brexit caused manufacturers all sorts of problems as border delays caused a sudden drop in exports as the UK began a new trading relationship with the EU. However, in the last couple of months, the number of exports has increased as businesses became more familiar with the additional paperwork required.
Economic recovery
Economists have forecast the UK’s economy to grow by 4% in 2021 and 7.3% in 2022. However, there are still doubts about the long-lasting effects the pandemic will have on the economy which will remain to be seen over the coming years. The latest CIPS Purchasing Managers Index (PMI) figures for April 2021 look a very promising read with PMI increasing from 58.9 in March to 60.7 in April demonstrating growth and the highest PMI on record since 1994. But, the economic recovery forecast by economists could be thwarted by a new variant or another wave of COVID-19 infections resulting in tougher restrictions.
With Brexit well and truly behind us and the vaccination process well underway manufacturers have good reason to be optimistic about the future and the economic recovery.
How can we help?
At Hawsons we have a dedicated team of manufacturing and engineering accountants at our offices in Sheffield, Doncaster, and Northampton. Our specialist team offers a wide range of services which are tailored to meet your individual needs. Our understanding of the issues faced by the manufacturing and engineering businesses means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.
Free initial meeting
Craig Burton
Partner, Sheffield
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