Britain’s manufacturers have enjoyed a strong performance across all parts of the UK in the last year on the back of buoyant world markets, according to a report published by EEF (the manufacturers’ organisation) and the accountants and business advisory firm BDO.

However, it also highlights concerns as to whether this “uniformly positive picture will be maintained in the coming year”, with three factors potentially driving greater divergence in regional manufacturing performance.

“These are the risk of a disorderly Brexit, the emergence of global trade tensions and the relatively weak investment picture, “which could compound regional productivity differences”.

The EEF/BDO annual Regional Manufacturing Outlook highlights the breadth of manufacturers’ contribution to the economic areas of the UK in terms of output and jobs.

It also illustrates the diverse contribution of the regional manufacturing economies to exports and, as such, their exposure to risks from Brexit and possible tariff increases. By destination, a number of regions have a “strong exposure” to the EU.

These include Wales, which sends two thirds of its manufacturing exports to Europe (60% to the EU), the North East (59% to the EU), East Midlands (54.9% to the EU) and East of England (52.5% to the EU).

Meanwhile, the North West is the biggest exporter to the Middle East and North Africa, while the West Midlands is the biggest exporter to Asia, Oceania and the USA.

The uncertainty regarding the post-2019 trading relationship with the EU is being compounded by rising global trade tensions, with particular concern for metal manufacturers in the West Midlands and Yorkshire and Humber, as a result of President Trump’s recent tariff announcements on the EU.

The report also finds that there are huge variations in manufacturing productivity across the country, with areas such as the North West, Scotland and the South West performing well, while London and the Midlands regions fall well below the UK average, illustrating that there is still work to be done to get productivity growth back on track.

Tom Lawton, partner and head of BDO Manufacturing (www.bdo.co.uk), said: “Manufacturing remains a hugely important part of the UK economy. It is a true sector powerhouse that creates jobs, wealth and growth across all UK regions. The Government cannot afford to lose focus on the importance of UK manufacturing, as we endure the twists and turns of EU negotiations.

"A long-term practical industrial strategy that delivers a positive trading environment and helps to tackle the productivity puzzle is crucial.

Without that, the sector will struggle to have the confidence to invest in skills and automation, which are so important to the future of the UK manufacturing.”