–EEF: UK Q3 Manufacturing Total New Orders Balance 35 vs 34 In Q2
–EEF: UK Q3 Manufacturing Export Orders Balance 30 vs 23 In Q2
–EEF: UK Q3 Manufacturing Employment Balance 17 vs 9 In Q2
–EEF: UK Q3 Expected Manuf. Output Next 3 Months 27 vs 22 Q2

LONDON (MNI) – UK manufacturing output and orders hit record high
levels, although the pace of expansion is expected to soften in the next
three months, according a third quarter survey from the Engineering
Employers’ Federation.

The EEF survey, conducted between Aug 4 and Aug 25, found the past
three months output balance rose to 33 from 30 in the Q2 survey, and
total new orders increased slightly to 35 from 34. Both of these
outturns were the highest in the EEF series, which dates back to 1995.

UK manufacturing’s rebound was broad based, with all sectors in the
EEF survey recording solid positive balances.

Employment in the sector picked up sharply, with the balance of
firms hiring rising to 17 from 9 previously.

Manufacturers do not expect to maintain the pace of expansion over
the next three months. The forward looking EEF balances were softer than
those for the past three months.

Expectation balances for the next three months were 27 for output
and 22 for new orders. Employment, however, is expected to grow at more
or less the same pace in Q4, with a balance of 14 for the next three
months, the strongest reading on record.

The EEF also noted that manufacturing investment turned positive
for the first time this year. A balance of 9% of firms reported
increases in capital expenditure in the past three months.

The EEF suggested that if the trend in business investment
continues the UK will see a much faster recovery investment in spending
compared with previous recessions.

The EEF survey results, on the face of it, present a more upbeat
picture than the Markit/CIPS purchasing managers manufacturing index.
The August manufacturing PMI fell to 54.3, dwon 56.9 in July, hitting
its lowest level since November. Analysts are anticipating are sharp
slowdown in the rate of UK growth in Q3 compared to Q2.

All balances cited in the EEF survey are percentage balances,
reflecting the balance of those expecting increases or decreases in the
given categories. They do not, therefore, provide a direct indication of
the rate of growth but rather of how widespread that growth is.

The EEF survey covered 519 companies.

–London newsroom: 4420 7862 7492; email: wwilkes@marketnews.com

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