West Midlands manufacturers defy claims of slowdown
SME manufacturers in the West Midlands are defying predictions of a slowdown in the sector by posting increases in current and predicted sales.
Almost two-thirds (62%) of respondents to the latest Manufacturing Barometer have indicated that turnover increased in the last six months with nearly three quarters (73%) expecting further increases over the next four months.
In further positive news, 59% of firms which were questioned are still looking to recruit and more than half (56%) said they were planning to increase investment in new technology – the highest figure recorded in the three-year history of the Barometer and an indication of a movement towards more advanced manufacturing.
The Barometer is the largest survey of its kind, reflecting the views of 79 SME manufacturers across the West Midlands, which between them employ more than 3,500 people.
Over half of companies (54%) cited regulation as their biggest burden, followed by the availability of new recruits with the right skills (42%) and the ability to secure appropriate finance or investment (40%).
Only 35% said that the cashflow profile of the business hindered their future development.
The Manufacturing Barometer is the largest independent survey of SME manufacturing companies operating in England and has been running since 2009. The survey considers responses from a number of stakeholders but remains independent.
The specialist topic of the latest study is ‘identifying barriers to growth’. Responses revealed that the burden of regulation and finding new recruits with the right skills are the two main concerns for the region’s SME manufacturers.
Lorraine Holmes, Area Director of the Business Growth Service’s Manufacturing Advisory Service, said: “There have been concerns that manufacturing is slowing down and GDP figures from the Office for National Statistics did indeed reveal a slight decline.
“I’m pleased to say that SME manufacturers are feeling more optimistic. Turnover for the last period has bounced back and the outlook for future sales appears very positive, with automotive and construction strong and new opportunities in offshore wind and nuclear opening up previously untapped markets.
“Record investment plans in technology should be welcomed. This shows companies are recognising that they need to spend in order to compete globally, offering unique processes and technologies that establish themselves on the added value chain.”
Predicted recruitment of new staff has also remained high, although this could be due to companies not being able to find the skilled employees they need, she added.
Any slowdown by the bigger manufacturers is likely to take a while to cascade down the supply chain.
Ms Holmes said the industry needed to be mindful that there might be a delayed reaction to the predicted slowdown.
Ms Holmes said firms had also been asked which factors they felt supported growth.
“Nearly three quarters (74%) feel their current business plan is important to growth, whilst the skills and expertise of the management team and a strong sales strategy both scored highly (70% and 58% respectively),” she said.
“What was pleasing to see was MDs praising the motivation of their workforce as a significant factor in their success.”
Business Minister Matthew Hancock commented: “Small businesses have been at the forefront of our economic recovery and today’s findings show no sign this is slowing down.”
He said it was important that manufacturers received Government backing every step of the way.
The Business Growth Service, launched in December 2014 by the Department for Business, Innovation and Skills, brings together GrowthAccelerator and the Manufacturing Advisory Service, with additional elements from the Intellectual Property Office (Intellectual Property Audits) and the Design Council (Design Mentoring).
