Manufacturers confident of export growth, Investec event hears

BUSINESS owners and managers have heard that the region’s manufacturing sector remains in good shape and that local firms are confident of further growth.

Speaking at an Investec Wealth & Investment seminar on risk and opportunity in the economy at Swinfen Hall Hotel near Lichfield, Felicity Burch, a senior economist at manufacturers’ organisation EEF, said: “The good news is that manufacturing is continuing to grow.

“It is a very export-intensive sector and so it is affected by what is happening in other markets but manufacturers continue to expect growth and West Midlands manufacturers have outperformed the broader UK in the last quarter.”

Burch said the domestic market remains the driver of output growth.

“It has been a tough three months for exports but manufacturers expect to see greater demand,” she said.

She also said manufacturing firms are continuing to invest.

“There is quite an appetite for opportunities when companies can find them and for diversification where posiible,” she said.

Earlier the audience at the event – staged in conjunction with TheBusinessDesk.com – heard from InvestecWealth & Investment’s head of investment strategy John Wyn-Evans who said that the company’s Global Investment Strategy Group had ranked risks in order of importance.

Top of that list is the re-emergence of the Euro Zone crisis, followed by the deterioration in the Ukraine/Russia situation and a Chinese financial crisis.

A Middle East War and the Ebola outbreak spreading completed the list.

“These are not necessarily things that we think will happen but in that order they are things that could have the biggest impact on financial markets,” he said.

Referring to the number one risk, he said: “We think the ECB {European Central Bank{ has got a lot of this covered but there are still disagreements in Europe about how we should deal with these things.”

Wyn-Evans highlighted the emergence of middle class consumers in Asia and elsewhere as a very interesting area for investors.

“There will be three to four billion of them in emerging markets in 20 years’ time. That is set to be a big driver for global growth,” he said.

The third speaker at the event was Victoria Garrad, a partner and employment law specialist at Birmingham-based law firm Gateley.

She told the audience that there is an increasingly competitive landscape for attracting and retaining talent in the workforce.

“There is a growing confidence amongst employees and that poses a risk for employers,” she said.

“Candidates for jobs now have three or four offers on the table and so employer branding is increasingly important.”

Losing talent is also a risk, she said, and warned that if employees do leave employers need to make sure they protect confidential information.

“It is time to review restrictive covenants,” she said.

Turning to changes in employment law, Garrad focused on the recent ruling that holiday pay will in future have to take into account overtime payments.

“And unfortunately there is the potential for this to be retrospective,” she said. “A lot of companies are grappling with whether they have been paying holiday pay in the right way.”

Garrad did suggest, though, that there may be a couple of loopholes for employers.