MANUFACTURING in the East of England has continued its strong recovery over the last three months, according to the latest survey published by the manufacturers’ organisation EEF and accountants BDO.

The survey shows that manufacturers in the region are continuing to enjoy good trading conditions on the back of strong demand in overseas markets, pointing to solid prospects for growth for the rest of the year.

More than three-quarters of the firms interviewed (78%) reported stable or increasing total new order volumes and nearly as many maintained or increased total output (72%) and recorded stable or stronger export markets (74%).

Greater confidence across the sector is also continuing to translate into some recruitment, although this largely involves temporary or agency working which will give employers flexibility should demand begin to slow.

Uncertainty about future demand had been dampening investment plans, but a number of sectors are now planning increases in investment, breaking the pattern of previous recessions by recovering at an earlier stage in the cycle.

However, the short-term optimism highlighted by EEF’s survey is shaded with a degree of caution about the risks to growth in 2011 as fiscal austerity measures kick in at home, combined with a weaker outlook for the US and risks to the sustainability of Asia’s growth.

Keith Hamilton, head of external affairs for EEF in the East of England, said: “Those regional manufacturers with overseas markets have continued to reap the rewards of continued growth in demand over the last three months. Europe in particular turned out to be stronger than expected.

“However, we have to maintain perspective that the recovery is coming from a very low base and the risks to the economy in the medium term haven’t gone away.

“The rebound in exports and modest improvement in investment will need to become much more firmly entrenched if we are to see a much-needed rebalancing of the economy.”