Manufacturing recovery continues despite challenges

19 June, 2023

The scramble to attract and retain talent also shows no signs of abating, with recruitment intentions remaining stable at +18% (+19% in Q1) improving substantially to +30% in the next quarter. These employment balances are very elevated by historic standards and, apart from the initial quarters of the pandemic, have been at elevated levels since the EU referendum.

Investment intentions, whilst still positive at +10% eased back from the 14% in the first quarter, perhaps reflecting the crossover between the end of the super-deduction scheme and the onset of the benefit from full expensing.

The survey also shows that, in the face of continued skills shortages and strong labour demand, wage growth shows little or no sign of easing with a fifth of pay settlements reached in April at 5% and a further 15% of settlements at 6% or above.

In terms of overall output this year Make UK and BDO are forecasting a contraction of 0.3% although this is a significant improvement from the contraction of -3.3% made in Q1 and the -4.4% forecast at the end of last year. However, Make UK is maintaining its previous forecast for growth of just 0.8% in 2024. UK GDP growth is at 0.4% for 2023 and 1.3% for 2024.

The survey of 327 companies was conducted between 19 April and 24 May.

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