There may be a rise in company formation in coming months, new figures released by manufacturers’ organisation EEF suggest. The organisation noted that there are signs of growth in the manufacturing sector.

The government has been encouraging the growth of existing firms as well as company registration in this part of the UK economy and hopes such activity will offset the decrease in employment in the public sector.

Of enterprises polled by the EEF, 18 per cent revealed they intend to increase their capital investment over the coming year, while 20 per cent have raised their recruitment.

Meanwhile, car manufacturers and the rest of the transport sector reported strong export balances.

The EEF predicts growth for the manufacturing sector as a whole of 2.8 per cent this year, and new company formation may play a role in this.

Commenting on the findings, chief economist at the organisation Lee Hopley said: “Manufacturers have bucked other recent negative indicators, holding out hope that the recovery has not yet run out of steam. Across much of the sector companies are still busy and orders are holding up, particularly from overseas markets.”

He added that the government’s growth review needs to focus on the most serious challenges facing the private sector, including access to finance and ensuring energy-intensive firms are not penalised by climate change policy.

Meanwhile, lowering taxes, curbing regulation and raising skills among the workforce were also cited as important.

Such issues may well have an impact on company registration, among other things.

Sounding a note of caution, BDO’s Tom Lawton added: “The economic turmoil in some industrialised economies is a cause for concern amongst all manufacturers. In particular, companies will be worried about how their order books will look in the coming months, as well as their prospects of recovering debt on sales already made.”

 
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