Results from May confirm the trend established earlier this year where mechanical engineering companies experienced an excellent Q1, it says.
EAMA chairman Martin Walder explains: “After a spectacular first quarter there was a marked downturn in the April Monitor, underlining the volatility of monthly surveys. May on the other hand shows a continuation of the Q1 trend with very strong prospecting numbers and good order levels.
“The lead indicators are settling at an interesting clip with nearly two in five firms reporting enquiry levels up both for UK and for export business. At the other end of the scale there are few companies saying their levels are down month-on-month. For UK business the three-average is around one in 10 firms and for exporters the average is even lower.”
Walder adds that order levels “really picked up” in May with around half of all participants recording higher levels, again both for UK and for export. Export average order balances are also now ahead of UK business (22 vs 18), reflecting the weak GBP’s impact.
He continues: “Companies continue to recruit at a high rate with May’s balance at +36 the highest level recorded in two years.
“The fact there’s a big uptick in orders should show through, if it’s maintained, in the overall investment numbers. Certainly investment levels and finance availability both for working and for investment capital are on strengthening trends. In fact since November last year, few companies seeking finance are reporting problems, only 2% for working capital and under 4% for investment finance.
“Nonetheless with all this good news the confidence levels remain largely unchanged. There’s a small uptick in the numbers reporting confidence up, pretty much offset by a similar size increase in the firms reporting confidence down.”
