As everybody knows, ‘bad news always sells’. The press is full of doom and gloom stories and every day journalists are fuelling talk of an impending recession. It’s therefore refreshing to be able to report some positive news, at least for the UK manufacturing sector.

British manufacturing is generally outperforming the rest of the economy and looks set to see off the wider economic downturn, according to research by the EEF, Britain’s main manufacturing industry organisation.

Manufacturers across London and the South East are continuing to defy the pervading economic gloom by posting their twentieth consecutive quarter of healthy growth, according to the latest survey, published in June, by EEF South.

Despite concerns over the UK economy, 99% of businesses surveyed predict either a stable or growing order book, with demand overseas particularly healthy.

Commenting, EEF South Chief Executive, David Seall said: "Manufacturing is providing a beacon of light amidst the current economic gloom and our member companies remain cautiously optimistic about their immediate prospects. Companies are responding to the squeeze on their margins from rising costs by continuing to invest in their businesses to drive up productivity. However, at a time of heightened uncertainty, the government needs to send a clear message that it will ensure that the UK remains an attractive place to do business."

This upbeat view is shared by fxstreet.com who tell us that although manufacturing activity has fallen recently, it is likely that there will be a recovery in manufacturing output in the months ahead and the sector will boost the economy rather than help to drag it into recession.

Manufacturing makes a huge contribution to the UK economy providing around 3 million high quality jobs and generating over half the UK's exports.

The UK is the word's 6th largest manufacturer. The manufacturing sector adds over £150 billion a year to the UK economy and accounts for three-quarters of all business R&D.
EEF has now revised upwards its forecasts for 2008. Manufacturing is forecast to grow by 0.9% and engineering by 1.3% this year, with a slight improvement in manufacturing next year to 1.0%. Engineering growth is expected to remain at 1.3% in 2009.