Manufacturing will lead UK's economic recovery, states EEF

The ‘Economic Prospects 2011’ report published by EEF also shows that growth for the economy is set to be better balanced as investment and net trade start to make sustained contributions.

The report also warns that there are some significant challenges this year that not only shape EEF’s central forecast, but also suggest a degree of caution. These include a separate survey which shows potential direct impacts on manufacturers as government spending reductions take effect.

In 2010 the sector outpaced expectations and the overall economy by expanding 3.8 per cent. This year, another strong result is forecast with 3.5 per cent growth for manufacturing compared to 2.1 per cent growth for the economy as a whole. In 2012 growth is forecast at three per cent and 2.6 per cent respectively.

This balanced growth is broadly based across all sectors with the top performers forecast to include mechanical engineering and metal products, which benefit from having high exposure to export markets where demand is likely to be strongest.