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Thursday, Jul 24, 2014

Business, World

British manufacturing emerges from years in the shadows

Reuters | Thursday, Jul 24, 2014

New business is coming from unexpected places to help power the whirring, high-tech lathes on the factory floor of Future Advanced Manufacture, one of the companies spearheading Britain's manufacturing revival.

"Even the Germans are starting to deal with us, which is unheard of," said Future AM's managing director Craig Peterson.

Manufacturing accounts for only a tenth of Britain's economy, compared with more than a fifth in Germany which is Europe's leader in the sector. But British factories are in the midst of a resurgence.

One major business survey this month showed the balance of manufacturers reporting rising domestic sales rose during the second quarter to the highest level since records began in 1989.

Future AM produces and tests parts for companies including plane maker Airbus and Schlumberger in the oil and gas industry.

Among its new clients is a German space and aerospace company, which Peterson declined to name. It buys propulsion parts from the firm based in Cheltenham, south west England.

Nearby, many other manufacturers are thriving, making the region one of the leaders of Britain's industrial revival along with the East Midlands which is home to train and car makers.

When Peterson headed a management buyout in 2008, shortly before global recession, Future AM had an order book of five or six weeks and work spread over two or three different sites.

Now it has a five-year order book and turnover rising 30 per cent in a year, with a greater focus on mass production on a single modern floor.

So far Britain's economic recovery has been led largely by consumer spending and an upturn in the housing market.

Its sustainability hinges on investment and industry picking up, a crucial issue for the Bank of England, as it gauges when to raise record low interest rates, and Britain's government.

With less than a year before the next general election, clearer signs of a more balanced economic recovery would be a boon for the ruling Conservative Party's prospects.

Toughened up by years of economic malaise at home and by crisis in their biggest export markets in Europe, Britain's manufacturers are finally clawing back their lost output, although it remains 7 per cent short of pre-crisis levels.

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