It marks the first time the industry has been optimistic about the future since the FDF’s Business Confidence survey was launched in 2010.
The sample size represents businesses employing over 27,000 with a combined turnover of £6.2bn. FDF members include industry titans such as Kraft, Kellogg, Nestle and Unilever.
Positive Q3 forecast
The majority of food and drink manufacturers (48%) reported increased volume sales in the past three months and 65% felt sales would rise in the next quarter.
Just 17% said they were pessimistic about prospects in Q3, with the most feeling there would be no change and 26% reporting business optimism.
FDF’s economic and commercial services director, Steve Barnes, said: “It is really encouraging to see optimism amongst our survey respondents so far this year. Holding your nerve in this economic environment is by no means easy and is a great credit to our members in difficult times.”
Export sales also appear to be enjoying an upsurge. Around 30% of respondents said that export sales had risen in Q2 and the same number expected exports to climb again in Q3.
“Looking ahead, we expect to see both our domestic and overseas sales increase as we head towards Christmas. Our commitment to grow our industry by 20% by 2020 is ambitious and we remain confident that we will achieve this goal,” said Barnes.
R&D and product launches
UK product prices are expected to stay the same in Q3 and the industry appears positive about investment in R&D and skills training.
New product launches are also projected to rise. The majority (61%) said that product launches would go up in Q3.
The optimism comes amid high raw material costs for UK food and drink makers with national data indicating a 2.6% rise in commodity prices between Q1 and Q2.
For the full survey, see HERE.