The weak pound is failing to deliver the expected boost in manufacturing exports, a survey has found.
Fewer than one in three companies questioned by Deloitte for its first “Made in the UK” survey said overseas sales had increased during the past 12 months despite the comparative weakness of sterling.
However, 94 per cent said they expected export volumes to either remain the same (39 per cent) or increase (55 per cent) over the next two years.
Jane Lodge, Midlands manufacturing industry leader at Deloitte, said: “Despite market predictions that the low value of sterling would dramatically drive up UK exports, the results illustrate that this has not happened as yet.
“It is imperative that companies which export in the Midlands region are all set to increase production in readiness for the anticipated upturn as the EU and US pull out of recession, when demand will surely increase and the effect of the low value of sterling will drive our export market in overall terms.
“The Midlands has a higher percentage of manufacturers that export and as the finding of the survey suggest, an export-led recovery could be underway in the next two years.”
Support for exporters and improved credit flows are the top priorities for the manufacturing sector and wider economy, Professor David Bailey of Coventry University Business School and a Birmingham Post blogger, said at the launch of the Deloitte report.
Combined with export growth, these could “help trigger a mini-renaissance in manufacturing”, Prof Bailey said.
“The results of the survey demonstrate how critical exports are to manufacturers and how important they are going forward for providing a stimulus to the economy. It is hoped that via outward- looking manufacturers the UK has a chance to export its way out of recession, if conditions allow.
“This is critical as the main stimulants to the economy – the monetary and fiscal stimulus, the manufacturing re-stocking and a degree of restored financial sector confidence – will only take us so far.
“Overall, those surveyed are optimistic as to export prospects, with more than half expecting exports to rise. This is a useful indication that sterling depreciation and export growth are still expected to be the biggest stimulus for the sector going forward.
“This reinforces my view that more should have been done to cushion the blow to the manufacturing sector during the downturn to keep the capacity in place, which will both secure jobs and provide the export platform needed for growth.”