· Production sector output up, but more growth required to reach pre-recession peak
· Exports growing faster than imports, but Government must re-double efforts to support exporters
Commenting on the latest construction, production and UK Trade figures released today by the ONS, Christian Spence, Head of Business Intelligence at Greater Manchester Chamber of Commerce, said:
“The latest construction data for March 2014 shows a moderate drop in output of around 1%, most likely affected by poor weather. However, with monthly data extremely volatile, the quarterly and annual comparisons show a more positive picture. The first quarter of 2014 showed output up 5.4% compared to the previous year and 0.6% to the previous quarter. The wider economic recovery alongside government schemes such as Help to Buy is driving the improvement in conditions for the construction sector and we continue to forecast significant growth in this industry for the rest of 2014 and into 2015. The recent Greater Manchester Chamber of Commerce Construction Sector Pipeline research indicates new work of over £11bn in Greater Manchester until 2017 delivering a significant positive impact into the local economy. The challenges for the sector are ensuring that people with the right skills can be recruited to deliver the projects, and that local authorities are able to grant planning permissions for the large volume of potential projects that now have impetus from their developers.
“The wider production sector continues to see conditions improve with output up 2.5% on the year in the first quarter, with manufacturing driving that growth with expansion of 3.5%. The sector’s fortunes improved significantly during 2013 and output is now increasing at a more normal rate of growth. There is still significant growth required before this industry exceeds its pre-recession peak of 2008. Our forecasts show that headline production figures will be held back over the coming twelve months with continued contraction in the mining and extraction sector, though our expectations for manufacturing are much more positive with growth rates of around 4% per year expected through to 2015.
“A further improvement in the trade deficit recorded for March is good news with exports growing significantly faster than imports month-on-month, however the goods deficit remains large and the monthly data is volatile. The longer-term trend is for an expansion in trade in services with a strong surplus whilst the goods trade deficit will remain large and may deteriorate in the short- to medium-term as the UK continues to outpace the growth in its major trading partners. Government must continue to redouble its efforts to provide support to exporters to enter new markets whilst encouraging non-exporting firms to seek opportunities overseas.”