A survey published by business advisory and accountancy firm BDO and Make UK has found that the UK manufacturing sector’s production has rebounded at the start of 2023. This is thanks to the improvement of global and domestic markets.
The Make UK/BDO Q1 Manufacturing Outlook revealed a noticeable advancement on the situation in the fourth quarter last year, reflecting improvements in other metrics like the European and UK PMIs, alongside a resurgence in Chinese demand.
The mechanical equipment and electronics sectors did particularly well, with the electronics sector’s overall orders growing by 64%. BDO and Make UK believe this may be thanks to companies investing before the Government’s super deduction scheme expires, especially to address labour shortages through digitalisation. Make UK senior economist Fhaheen Khan said:
“Manufacturers have seen a rebound at the start of the year as conditions have improved in their major markets, and business confidence has improved. However, one swallow doesn’t make a summer and it is far too early to say the worst has passed given the significant challenges the economy faces.”
He also said that the announcements in the budget would likely increase investment in the short and medium terms, but he added that manufacturers’ investment cycle would be better reflected by a permanent shift to full expensing.
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