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EAMA - Engineering & Machinery Alliance Press release

Friday 25 March 2011

 

The sober Budget could be just enough to sustain current good business
Mechanical Engineering Business Monitor for February 2011

 

In the first two months of 2011, UK mechanical engineering firms have continued to perform well according to the Engineering and Machinery Alliance’s Monthly Business Monitor. The question now is will the Budget stimulate business growth as the Chancellor intended.

Martin Walder, EAMA chairman: “Overall this was a pretty sober budget for straitened times. There wasn’t a huge amount in it for mechanical engineering SMEs, but a few well targeted measures should prove helpful over the longer term. With business prospects actively looking to place contracts and the high levels of orders recorded, as demonstrated by the February Monitor’s positive balance of +21 on UK business and +26 on exports, companies remain confident about the immediate future.

“There will be longer term tests later in the year as the Budget changes feed through. For example, up-rating the SME R&D tax credit and the extension on short life capital allowances should encourage further investment in innovation and in plant and machinery. Already this month, a third of companies reported investing in all areas. On the potential downside we will be watching North Sea operators’ plans. The energy sector has been bullish for many of our members over the past 18 months. We won’t want to see that falling away unduly.”

“Currently members are very positive about job prospects given the amount of business they have. Overall the moves on increasing apprenticeships and the new university technical colleges are of course to be welcomed but those initiatives are going to take some time to make a difference. Besides, many SMEs tend to have their own particular views about the skills they need. So the level of attainment and work ethic at 16 and 18 are the key criteria for them.

“Of course the Chancellor can only do so much. At the end of the day, access to finance is the crucial element. There will be no growth and no rebalancing unless the banks allow finance to flow through businesses so that they can innovate, invest and trade across the world.

“Maybe this month there is an indication that some improvement may be under way in that regard. But this is the second time in just under a year that we have started to see an improvement. And last time it proved to be a false dawn as companies reverted to recording more difficulties after only a couple of months.”

Notes to editors:

EAMA’s 12 trade associations represent 1,700 firms: Agricultural Engineers Association, -- British Automation and Robot Association -- British Paper Machinery Suppliers Association -- British Plastics Federation -- British Turned Part Manufacturers Association -- Confederation of British Metalforming -- Gauge and Toolmakers Association -- Manufacturing Technologies Association -- Polymer Machinery Manufacturers and Distributors Association -- Printing Industry Confederation -- Processing and Packaging Machinery Association -- UK Industrial Vision Association

The Monitor (February sample 90, 50% export)

1 Prospects/Inquiries

Month

UP

SAME

DOWN

UP/DOWN Difference

 

UK

Export

UK

Export

UK

Export

UK

Export

January 2009

15

13

24

47

61

40

-46

-27

February

22

23

38

54

40

23

-- 18

0

March

28

22

33

50

39

28

-- 11

-- 6

April

31

28

26

28

43

44

-- 12

-- 16

May

24

12

47

50

29

38

-- 1

-- 26

June

33

19

44

54

23

27

+10

-8

July

33

14

48

55

19

31

+14

-- 17

August

28

13

36

51

36

36

-- 8

-- 23

September

46

33

38

55

16

12

+30

+21

October

41

37

42

42

17

21

+24

+16

November

52

33

37

50

11

17

+41

+16

January 2010

58

42

33

49

9

9

+49

+33

February

50

52

41

37

9

11

+41

+41

March

58

38

38

55

4

7

+54

+31

April

44

36

46

52

10

12

+34

+24

May

43

26

44

66

13

8

+30

+18

June

49

33

37

55

14

12

+35

+21

July

36

30

47

57

17

13

+15

+13

August

31

31

42

53

27

16

+4

+15

September

43

41

40

40

17

19

+26

+22

October

40

31

47

60

13

9

+27

+22

November

44

41

46

52

10

7

+34

+34

January 2011

49

43

38

50

13

7

+36

+36

February

50

42

39

49

11

9

+39

+33

2 Order intake

Month

UP

SAME

DOWN

UP/DOWN Difference

 

UK

Export

UK

Export

UK

Export

UK

Export

January 2009

18

20

20

32

62

48

-44

-28

February

18

21

31

29

51

50

-- 33

-- 29

March

11

18

28

42

61

40

-- 50

-- 22

April

21

30

23

33

56

37

-- 37

-- 7

May

20

5

35

46

45

49

-- 25

-- 44

June

39

19

28

49

33

32

+6

-13

July

37

22

26

42

37

36

0

-- 14

August

33

22

23

41

44

37

-- 11

-- 15

September

51

34

26

43

23

23

+28

+11

October

40

23

43

56

17

21

+23

+2

November

34

22

39

44

27

34

+7

-12

January 2010

47

47

30

39

23

14

+24

+33

February

45

42

35

44

20

14

+25

+28

March

54

41

29

41

17

18

+37

+23

April

49

31

30

49

21

20

+28

+11

May

39

23

32

55

29

22

+10

+1

June

46

29

33

48

21

23

+25

+6

July

34

40

39

40

27

20

+7

+20

August

22

25

44

48

34

27

-12

-2

September

38

35

38

39

24

26

+14

+9

October

38

28

34

54

28

18

+10

+10

November

43

34

31

46

26

20

+17

+14

January 2011

57

45

22

42

21

13

+36

+32

February

46

47

29

32

25

21

+21

+26

3 Jobs in the UK

Month

UP

SAME

DOWN

UP Ė DOWN

January 2009

9

59

32

-23

February

0

67

33

-- 33

March

0

74

26

-- 26

April

2

65

33

--31

May

8

66

26

--18

June

8

71

21

-- 13

July

12

61

27

-- 15

August

8

70

22

-- 14

September

11

75

14

-3

October

19

56

25

-6

November

9

80

11

-2

January 2010

15

75

10

+5

February

18

65

17

+1

March

18

75

7

+11

April

19

73

8

+11

May

20

73

6

+14

June

20

72

8

+12

July

25

67

8

+17

August

28

65

7

+21

September

21

68

11

+10

October

21

71

8

+13

November

21

69

10

+11

January 2011

27

64

8

+19

February

32

64

4

+28

4 Investment Activity

 

 

Month

 

Investment stopped

Plans deferred

Developing projects

Investing in all areas

Investing in staff

Other

January 2009

10

28

40

6

8

8

February

27

31

17

4

17

4

March

31

22

25

10

6

6

April

28

28

32

5

2

5

May

22

28

35

6

4

6

June

25

34

22

9

9

1

July

22

30

35

6

4

3

August

30

19

26

11

5

9

September

12

22

30

20

12

4

October

25

17

29

8

17

4

November

10

27

30

3

25

5

January 2010

11

13

32

17

22

5

February

13

19

26

13

19

10

March

3

18

32

13

22

12

April

9

14

31

7

25

14

May

12

12

31

17

14

14

June

11

6

35

22

20

6

July

2

14

21

51

4

8

August

8

6

36

34

10

6

September

7

9

39

26

15

4

October

9

2

37

27

17

8

November

4

11

31

34

13

7

January 2011

8

6

29

43

12

2

February

2

5

41

32

9

11

Notes:

  • choice of statements in full:
    1. All investment activity stopped
    2. Investment plans deferred
    3. Developing projects but not committing to them
    4. Investing in all areas of the business
    5. Investing in staff development and training but not capital investment
    6. Other

5 Capital Availability 2009-2011

Month

More Difficult

About the same

Easier

 

Working

Investment

Working

Investment

Working

Investment

January 2009

48

58

52

42

0

0

February

39

40

61

60

0

0

March

37

41

61

59

2

0

April

41

36

59

64

0

0

May

22

24

76

76

2

0

June

25

33

75

66

0

1

July

22

23

78

77

0

0

August

33

30

63

68

4

2

September

14

21

79

76

7

3

October

25

21

69

75

6

4

November

18

25

80

73

2

2

January 2010

14

23

80

74

6

3

February

9

8

88

89

3

3

March

12

10

82

90

6

0

April

9

10

83

88

8

2

May

18

16

73

73

9

11

June

15

17

81

74

4

9

July

8

12

76

72

16

16

August

11

11

87

89

2

0

September

11

13

84

84

5

3

October

17

13

75

84

8

3

November

17

16

76

80

7

4

January 2011

18

18

74

70

8

12

February

9

12

78

76

13

12