UK Manufacturers Expect Exports, Investment To Rise
First Published Monday, 7th May 2012 11:45 pm - © 2012 Dow Jones
LONDON -- U.K. manufacturers expect exports to increase in 2012 due to buoyant demand in emerging markets, according to a survey published Tuesday.
Manufacturers' group EEF said 70% of firms surveyed said they expect a rise in exports this year and plan to step up investment to capitalize on new opportunities. Companies intend to invest in new machinery and equipment to expand production capacity to meet further demand, the EEF said.
The EEF quizzed 100 U.K. manufacturing companies and found almost a third see India and southeast Asia as their key growth markets for the year ahead. Almost half expect China to be the top export destination within five years, the survey found.
The survey results may reassure U.K. policy makers that a hoped-for rebalancing of the U.K. economy towards exports and investment and away from debt-fuelled government and consumer spending remains achievable, despite the troubles in the neighboring euro zone, a key export destination, and sterling's recent surge against rival currencies.
However, the EEF said more government help will be needed if U.K. exports are to meet finance minister George Osborne's GBP1 trillion-a-year target. It estimates exports of goods and services will need to grow at an annual rate of 9% to meet that target by 2020. Exports rose 4.8% on the year in 2011, according to official data.
"Expanding the U.K.'s export base is critical for growth in the years ahead," the EEF said in a report accompanying the survey. Key hurdles the government can help fledgling exporters overcome include navigating bureaucratic hurdles and getting access to finance, the report said.
A separate survey, published Tuesday by the Confederation of British industry, found business sentiment among small and midsize manufacturers improved in the three months to April for the first time since mid-2011.
A majority of firms surveyed said they expect new orders to accelerate in the next three months, driven by an increase in both domestic and overseas demand.
The survey covered 356 firms, the CBI said.