The balanced figures for UK orders were at -13% for the three month period, up from -19% for the previous quarter. Based on data from the poll’s respondents, it is expected to reach -1% in Q2. For export orders the deficit halved to -10% and is set to recover further to -2% by June.
There is a similar upward trend in the output figures. The negative balance again halved, up to -5%, and is expected to reach +6% this quarter. But the good news is tempered by continued global headwinds.
Due to increasingly volatile international markets, EEF has revised its GDP forecast down from 2.1% to 1.9%. It has also reduced its manufacturing growth forecast from 0.8% to 0.6%.
Lee Hopley, EEF chief economist, said the overall picture “shows a chink of light” after a gloomy end to 2015.
“But, we should not be getting the deckchairs out yet,” she warned. “The slide is bottoming out, but manufacturing is still in negative territory and faces a precarious climb back up amidst a storm of real uncertainty.”
Despite signs of growth, Hopley warned that British manufacturers don’t need “more pressure from domestically generated uncertainty or costs”.
“We’re urging the chancellor to take this message on board and signal support for the sector by avoiding creeping cost and policy changes at the next Budget,” she added.
