Growth in UK manufacturing
was mirrored by an upturn in funding of new plant, machinery and
business equipment during the fourth quarter 2010.

Manufacturing output was up
1.4% even while the rest of the UK economy shrank, reported the
Office of National Statistics. Demand has been particularly strong
from export markets, helped by sterling being weak.

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FLA head of asset finance
Julian Rose said: “The asset finance market tends to act as a
leading indicator of business investment.

“The strong growth seen in
the last two quarters of 2010 in funding of new plant, machinery
and business equipment would fit with the recently reported growth
in production output.”

The UK manufacturing figures
build on a 1.1% increase in manufacturing output during the third
quarter of 2010.

UK vehicle production has
been particularly strong, rising by 27.8% for the full year
2010.

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Paul Everitt, chief executive
of the Society of Motor Manufacturers and Traders, said: “UK
vehicle production is leading the manufacturing
recovery.

“Manufacturers exported more
than am vehicles last year, underlining the competitiveness and
desirability of the current model line-up.”

A spokesman for the
Manufacturing Technologies Association added: “We were pleased to
see manufacturing performing relatively strongly.

“Exports are being helped by
the position of the pound and the competitive strength of many UK
manufacturers, especially in hi-tech sectors.”

UK asset finance companies funded a total of £4.6bn
(€5.4bn) of investment in the three months to September 2010, up
15% on 2009. The trend is believed to have continued during the
fourth quarter.