West Midland manufacturers are showing "healthy signs of growth" and "remarkable resilience" a leading business adviser in the region said yesterday .
Ronnie Bowker, senior partner at Ernst & Young in Birmingham, was speaking following fresh figures showing the UK manufacturing sector is continuing to defy the strong pound and the global economic slowdown, with a better-than-expected performance in October.
The Office for National Statistics (ONS) said factory production rose by 0.3 per cent on the previous month. That was better than the 0.2 per cent predicted by analysts and clawed back some of the 0.6 per cent decline recorded in September.
The figures mirrored the results of other recent surveys suggesting that industrial order books were holding up in the face of uncertain economic conditions.
"The West Midlands' manufacturers are showing signs of growth and are demonstrating remarkable resilience to the current market conditions," said Mr Bowker. "Despite a weak dollar, which has dented the profits of many UK exporters, high raw material costs, and tightening credit, manufacturers are reporting a marked increase in output.
"A report earlier this week by the Chartered Institute of Purchasing and Supply also shows that employment in the sector is booming - encouraging news for an industry which is often considered to be in decline."
Global Insight economist Howard Archer said: "For now at least, the manufacturing sector appears to be showing ongoing resilience in the face of the credit crunch, recent extended strength of the pound, higher interest rates, elevated oil prices and concern over slowing global growth.
"However, it does seem highly likely that these factors will increasingly weigh down on manufacturers over the coming months."
The figures ensure a healthy start to the fourth quarter of the year, with the UK economy overall expected to grow by about 3.1 per cent in 2007.
That figure could slow to below two per cent as the fall-out from the credit crunch takes hold.
Paul Dales, of Capital Economics, said, however, that yesterday's output figures did little to offset the weaker tone of many other surveys on the UK economy.
He said: "The manufacturing surveys were fairly strong in November, possibly suggesting that structural reforms have left industry well-placed to cope with the strong pound and global slowdown.
"But while these may help, they will not prevent a cyclical downturn altogether. We expect that industry will weaken from here and wouldn't rule out a manufacturing recession in the coming quarters."