Manufacturers prove star performers in battle to boost exports

MANUFACTURERS in Greater Birmingham continue to be the sub-region’s star performers in the battle to boost export levels.
 
New figures from the Greater Birmingham Chambers of Commerce (GBCC) show global sales and orders increased in the second quarter of 2015, with manufacturers leading the way.

The GBCC quarterly economic survey, supported by recruitment and people development agency Katie Bard, showed that manufacturers increased export sales by between 10% and 35% and orders went up by the same margin to 36%.
 
Greg Lowson, the chamber’s president, said: “Manufacturers in Greater Birmingham are turning out to be the heroes of UK’s export efforts. To maintain such determination in difficult global conditions speaks volumes for the quality of their products and their global search for trade.
 
“Admittedly, we are still talking in fairly low numbers and we still have a way to go to match sales and orders of 12 months ago. However, the survey showed the determination of Greater Birmingham businesses, with 66% of manufacturers confident turnover would improve while 54% expected to increase profitability.”
 
Paul Faulkner, new chief executive of the GBCC, said: “The chamber has been vigorously supporting the export drive and will continue to do so. Birmingham was among the seven West Midlands chambers which have won the UK Trade & Investment (UKTI) International Trade Services contract to help business of all sizes to succeed overseas.
 
“Exports are a key priority of the Government’s ambitions for economic growth and the team in Birmingham has a strong track record of providing international support to businesses in the West Midlands, having delivered the programme for the past eight years.”  
 
The performance in the home market was also maintained during the three-month period, with the number of companies reporting increased sales rising to 40%, against 33% in the previous quarter. Orders were also up with 37% of correspondents – compared with 27% in Q1 – recording increases.
 
Although over half (54%) said they were attempting to recruit, 63% said they had experienced difficulties in the past three months. Almost three-fifths (58%) struggled to recruit skilled manual and technical staff and a quarter (25%) could not find unskilled or semi-skilled personnel.
 
John Mortimer, co-founder and chief executive of the Angela Mortimer group and Katie Bard, said: “This is a very serious issue. It is not good enough to complain, blame or wring hands in distress. People who wish to recruit into the future need to take serious and long term action on the skills issue, first to define what they really mean, and then to take proper action, including long term recruitment strategy.”
 
In the service sector, export activity struggled with 25% reporting increases in sales, down from 39% in the previous quarter. A quarter (25%) recorded an increase in orders, a drop from 40% in Q1.  
 
Recruitment was also an issue for the sector. While 48% were attempting to recruit, 73% said they were experiencing difficulties across the board in all categories.
 
While investment plans for equipment and training remained low, confidence was holding up, with 64% of firms expecting turnover to improve while 56% were forecasting better profitability.

• Elsewhere, the latest CIPS UK Manufacturing PMI has reported a slowdown in growth, the lowest growth since early 2013.

Commenting, KPMG’s UK Head of Industrial Manufacturing, Stephen Cooper, said: “This slowdown in UK manufacturing growth is disappointing, considering the recent steady improvements in previous months of this year.

“The strengthening of the pound relative to the Euro, while good for summer holiday travellers, will not be good for UK manufacturers as it makes UK manufactured goods more expensive for those who import them. As 40% of UK exports are still exported to the Eurozone, any disturbance downwards in that market will impact negatively on UK manufacturing.”

He added: “The largest global manufacturing countries of China and the USA have also shown a continued contraction in manufacturing over recent months due to weaker export demand for both countries goods. This, combined with the Eurozone issue, does not give a good signal for the coming months for global manufacturing, and UK manufactures will be watching events closely.”