By Daniel Hunter

After a year of strong confidence in 2014, manufacturers are have started the New Year in a much more sombre mood.

Research by EEF, the manufacturers' organisation, shows that just 37% of those surveyed expected the UK economy to improve in 2015, down from 70% last year. Seventeen percent expect it to deteriorate, up from 5% in 2014.

A further 38% expect the global economic outlook to take a turn for the worst, up from 5% last year.

Individual optimism

Despite the gloomy outlook for the UK and global economies, manufacturers are much more buoyant about their own businesses.

Seven in ten (69%) manufacturers expect to improve productivity, 58% said UK sales are likely to grow and nearly half (49%) will hire more staff.

Terry Scuoler, Chief Executive of EEF, said: “Manufacturers’ confidence at the beginning of last year was very high - one year on and, while still positive, it has very evidently eased back. The realities of 2014 have taken the edge off future forecasts and what we are now seeing as we head into 2015 is a far more muted outlook, tempered by a backdrop of difficulties in the EU and wider geo-political concerns.

“The sector is still making good strides, but confidence can be fragile and with an election on the way it is vital that uncertainty and disruption are kept to a minimum. Recovery is by no means guaranteed and we would urge party leaders — and the next Government of whatever shade - to remain focussed on delivering a fully balanced, stable economy where manufacturing is enabled to expand and grow.”

Mark Stephens, Deputy CEO and Group Commercial Director at Aldermore, said: “Although confidence has fallen back, it is great to see that the manufacturing industry is predicted to continue to grow in a way that fuels the UK economy during 2015.

“At Aldermore we’re seeing ever increasing demand from all sorts of innovative UK manufacturing firms needing to free up cash-flow to expand their business and take on new contracts. We are also seeing an increasing number of our customers making real inroads in the export market selling their produce across the globe. So the prospects for the manufacturing sector are still looking very strong going into 2015.”

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