With the UK looking increasingly like the best place in the world to do business as far as rail infrastructure goes, it's not surprising that Hitachi has decided to make the UK its rail engineering global HQ. The move also brings this giant - famed for its involvement in the Japanese Bullet Train phenomenon - closer to European rivals such as Siemens, as the bidding war hots up for HS2.
And that wasn't the only good news for UK manufacturing in Budget week. Bentley Motors announced its decision to move the manufacture of all its novel 'W' configuration W12 series 12-cylinder engines from Germany to the UK, while Jaguar Land Rover unveiled a huge £45m servo press line at Halewood, ensuring a plentiful supply of body panels to satisfy the very hungry export markets for its vehicles.
And the Budget itself was particularly manufacturer-friendly this time round - for both big and small operators. A significant and much-needed energy package, mostly targeted at the big energy users (though clearly not welcomed by green lobbyists or carbon market traders), will at least help keep manufacturing jobs in the UK, while the doubling and extension of the Annual Investment Allowance will be a shot in the arm for businesses that are keen to invest in new plant and machinery and thereby play their part in growing the UK economy.
Meanwhile, the rise in R&D tax credit for small and medium-sized firms should prove a fillip for those young, innovative businesses that are frequently loss-making in their early years. And with the Seed Enterprise Investment Scheme now made a permanent fixture, this should boost the range of financing options available to growing businesses and spur greater use of equity finance by small firms.
Richard Acreman, who heads up the small technology services company, WM360, sums it up for the small business sector:
“As one of London’s small technology firms, we fully expected that the Chancellor would offer us his traditional mid-Budget mention. However, he went several steps further this year, effectively ticking off our Budget wish-list, point-by-point.
"The decision to offer all UK firms increased tax breaks on money invested in innovation, along with the continuing work to reduce corporation tax to an internationally competitive rate, will go a long way towards helping Silicon Roundabout challenge Silicon Valley in the global battle to lead the technology market.
"These changes are exactly what is needed to fuel the engines that will power the UK into the next 'boom'".
According to the latest CBI Industrial Trends Survey, published the day after the Budget, activity in the UK manufacturing sector remained robust in March and overall demand continued to rise, with total orders improving. However, output growth and export orders eased last month.
The survey of 368 manufacturers found that total order books improved slightly again in the three months to March. This strength was broad based, with above-average results in 14 out of 17 sectors.
Export orders fell back, but remained above average in 11 out of 17 sectors.
Output growth also slipped to a five-month low, but still remained firmly above average. Growth is expected to edge up over the next three months, albeit at a slower pace than predicted in January and February
Anna Leach, who is head of economic analysis at the CBI, said the picture in the manufacturing sector remains positive and that, overall, demand continues to rise and output growth is robust.
“Growth in exports is crucial to rebalancing the economy and ensuring a sustainable recovery," she added. "Over the last few surveys, manufacturing export orders have underperformed relative to overall orders as the UK’s domestic recovery has caught hold more quickly than some of our key trading partners – most particularly, the Eurozone.
“Measures announced in the Budget should help businesses to break into new, faster growing markets and underpin an improvement in the UK’s export performance.”
Les Hunt
Editor