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Food sector 'beats manufacturing downturn'

12 August 2011

The food and drink industry has bucked the general trend of declining manufacturing output with a 0.5% increase in June 2011 compared to the same month in 2010 in the UK

The Office for National Statistics published results showing that while food and drink production output increased, this is in stark contrast to the manufacturing sector as a whole which has decreased its output by 0.5%.

The latest Food and Drink Federation business confidence survey (quarter two: April-June 2011) has also revealed findings which indicate that the food and drink manufacturing sector is one of the most resilient, even in difficult times.

UK sales remain strong and have grown over the past quarter for almost two thirds of respondents with 76% expecting growth over the next three months and encouragingly most companies expect exports to rise over the next quarter.

This is against a backdrop of rising commodity prices. 74% of food manufacturers have faced increases in the price of commodities such as wheat, corn and cocoa while 63% of respondents expect further increases over the next three months.

While these factors are impacting on investment levels, businesses continue to increase their investment in R&D and skills.

Terry Jones, FDF’s Director of Communications said: “The stability in our sector is due to our industry's ability to innovate, develop new products and market them effectively to appeal to consumer tastes.”

“Where most other sectors are struggling in 2011, food and drink output is growing and our track record demonstrates an industry that is reliable and capable of growth in adverse conditions.”

“However optimism among food manufacturers about the general business environment remains mixed. Increasing commodity prices are clearly seen as a threat to future growth in the sector. This means that our continuing work with Government to remove other barriers has taken on even greater importance. This could unlock the potential of our sector while benefitting the wider UK economy.”


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