Manufacturing: Investment Growth Forecast

Lord Sheldon Excerpts

Tuesday 5th July 2011 Lords Chamber

Asked by

[Lord Sheldon]

To ask Her Majesty’s Government what is their forecast for the growth of manufacturing investment in the current year.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government do not make forecasts of growth in manufacturing investment specifically. However, the Office for Budget Responsibility has forecast total annual business investment growth of 6.7 per cent in 2011. This forecast is underpinned by an extended period of low interest rates, reductions in the rate of corporation tax and strong growth in profitability. The findings of independent surveys by the CBI and the manufacturers’ organisation, the EEF, also suggest that manufacturing investment will increase in 2011.

[Lord Sheldon]

My Lords, I thank the noble Baroness for that reply. On 28 April the Prime Minister said that there had been an increase in manufacturing output and exports in the previous 12 months, but on 25 May the EEF, the manufacturers’ organisation, commented that although there was export growth, manufacturing investment was down. This was confirmed in June by the Project Management Institute. How does the noble Baroness consider these matters?

[Baroness Wilcox]

There is no doubt that we have gone through a soft period in the last three months. However, the latest surveys from the CBI and the EEF suggest that output will grow overall in the second quarter of 2011, with manufacturers expecting growth to continue well into the third quarter.