South west manufacturers are seeing strong growth prospects as economies continue to open up and the economic recovery strengthens, according to a major survey published today by Make UK and business advisory firm BDO.

Having seen a brutal 10% decline in output in 2020, the sector in the UK overall is now set to recover a significant amount of that loss in 2021, with forecasts suggesting it will have recovered the total loss from last year by the end of 2022.

Make UK, added, however, that supply chain disruption and some labour shortages could hamper this improving picture in the final quarter of the year. The slow recovery in the aviation and aerospace sectors where the south west has a high exposure could also have an impact for some time.

In particular, both UK orders and total orders were very strong for south west companies with the total order balance of +33% very strong by historical standards. While output fell slightly, the business confidence indicator remains strong pointing to continued growth for the immediate future.

As a result of the robust growth prospects and increased business confidence, investment intentions have also increased substantially to a balance of +50%, the second highest of any UK region, while companies stepped up recruitment to meet demand.

Make UK is now forecasting growth for the sector of +7.1% in 2021, tailing off slightly to +4.4% in 2022. However, should these be met it will ensure the sector has recovered all the lost output from 2020.

Jim Davison, region director for Make UK in the south west said: “South west companies are seeing buoyant growth conditions as prospects continue to accelerate for manufacturers with economies at home and abroad continuing to open up.

“However, the slow recovery of the aviation sector, supply chain shortages and the rapidly escalating increase in shipping costs are threatening put roadblocks on the road to faster growth despite the current optimism.”