MANUFACTURERS in Yorkshire are above the national average but may struggle in export markets going forward, industry research shows.

The latest quarterly Manufacturing Outlook survey by EEF, the manufacturers’ organisation, and business advisors BDO, shows that business confidence in Yorkshire has taken root, with the strong performance in the sustained in the third quarter.

A balance of 32 per cent of regional manufacturers reported higher output, against a UK average of 10 per cent, with a further 27per cent seeing growth in order books and a balance of 33 per cent looking to recruit.

But manufacturers are more cautious about export performance with the EEF warning that the demand picture is now more uncertain than for some time. A flagging Eurozone economy, rising political risks and a stronger sterling exchange rate has led exporters to report negative prospects for the first time since early 2013.

Andy Tuscher, EEF regional director, said: “Growth in manufacturing remains positive in Yorkshire, although it is understandably starting to return to more moderate and sustainable levels as the pent-up demand which built up during the recession begins to expire.

“However, there are clearly risks overseas which could threaten the pattern of growth going forward. While politicians may be focused on next year’s election it is critical that efforts over the rest of this parliament remain focused on sustaining growth across manufacturing and the economy.”

Jason Whitworth, BDO head of manufacturing in Yorkshire, welcomed the positive UK business trends but urged businesses to focus investment on boosting overseas trade to ensure sustainable growth.

Nearly half of the region’s small and medium firms have admitted that they could be more innovative , according to the latest Close Brothers Business Barometer.

Mike Randall, Close Brothers Asset Finance chief executive, said: “Innovation is a critical part of many firms’ growth strategies and yet our survey has highlighted that the ability to be innovative is a stumbling block for many businesses in the region. Less than a quarter of the local companies felt that they are sufficiently innovative.” The Business Barometer revealed that 38 per cent of regional SMEs questioned intend to seek funding for growth within the next 12 months.