UK Food and Drink Industry Optimism Hits a Three Year High
The Food and Drink Federation (FDF) has reported that business optimism amongst UK food and drink manufacturers has reached the highest levels seen since 2010. As FDF’s Business Snapshot shows, Q3 2013 sales strengthened in both domestic and international markets. Findings reveal a sector confident of continued sales growth in Q4. Survey highlights include:
Sales
* UK sales index up with growth set to continue: Sales grew by 1% in July and August 2013 on 2012, aided by good weather and stronger consumer confidence, up nine points in Q3. The majority of responding food and drink manufacturers expect continued growth in the run-up to Christmas.
* Export sales index up strongly driven by EU recovery: Value added exports were up 8% in July and August as Eurozone markets recovered.
Average Costs
* Costs are currently up, but hopes are for a fall: Rises in the price of energy and certain commodities such as dairy and cocoa resulted in increased Q3 costs. However, there were some price drops, for example, wheat. The hope for many is that Q4 costs will fall back as ingredient prices drop.
Innovation
* Stronger capital expenditure boosts new product development: Capital expenditure has shown continued recovery, with businesses looking to boost productivity and expand capacity to fulfil increased orders. However, expenditure is slightly down on research and development and training as the focus shifts to seasonal product lines for Christmas and New Year.
FDF’s Economic and Commercial Services Director, Steve Barnes, comments: “This is the most optimistic we have seen UK food and drink manufacturers since FDF started this survey three years ago. This good news could not have come at a better time, with Christmas products already starting to appear in shops. As well as seeing growing confidence amongst shoppers here in the home market, the message is loud and clear that there are significant gains to be made in exports, where we have seen 8% growth in value added products. We hope that UK food and drink manufacturers will take heart from these findings and confidently compete on a global stage.”
