South East: London and SE manufacturers lead the way on exports, but trail behind on confidence

Manufacturers in London and the South East are leading the way when it comes to exports, but come in sixth out of nine regions when it comes to business confidence, according to a new annual report launched today by EEF, the manufacturers’ organisation, and global law firm DLA Piper.

The report, Regional Manufacturing Outlook, draws upon survey data and the latest ONS figures to provide a longer-term picture of the state of UK manufacturing. It shows that London and the South East account for more than a quarter (25.4%) of the UK’s manufactured exports – the biggest contribution by any single region.

The EU is the UK’s largest market for manufacturing exports and this is no different in London and the South East where it accounts for 47% of the region’s goods exports. Its second biggest market, Asia, accounts for 17%.

At the same time, London and the South East is also the UK’s most productive region, with productivity at 121% of the UK average. There is also good news on the employment front. Between 2010 and 2014 manufacturers boosted employment by 5% in the South East and 6% in London. Almost 523,000 people are now employed by manufacturers across the region – 6% of the region’s total workforce.

In the past year the region has posted the strongest output balances in the UK and total orders have been positive for 11 consecutive months, the longest for any region.

But London and South East manufacturers’ are trailing behind in the business confidence league. The region scores 6.59 out of a possible ten points for confidence, placing it sixth out of nine regions. This suggests that manufacturers in the region are not feeling as confident as they could or should be, compared to their peers elsewhere in the UK.

Jim Davison, South of England region director at EEF, said: “This report shows that London and South East manufacturers are punching above their weight and putting our region on the map. Over a quarter of the UK’s manufactured exports are being made in our region and this success story enables our ingenuity, creativity and skills to be recognised around the world and particularly in Europe, our biggest export market.

“Despite this, London and South East manufacturers are feeling less confident than they could or should be. This could be a hangover from the recent recession or it could be because of ongoing uncertainty about the Euro and the situation in Greece. The latter are affecting investment and longer-term planning in export markets and this could be taking the shine off manufacturers’ confidence.”