Tough year for manufacturing predicted
THE ongoing flow of bad news from key markets and a lack of access to capital will make 2012 a difficult year for the majority of North West manufacturers, according to one advisor.
Philip Storer, partner and manufacturing specialist at BDO in Manchester, said: “After 30 years of decline there is now widespread consensus that a strong and vibrant manufacturing sector is fundamental to the economy.
“The task of rebuilding the manufacturing sector will not be easy and we must accept that it may take years. However, a renewed focus on manufacturing is vital for growth.
“In 2012, we expect that the Government will continue to focus attention on the rebuilding of manufacturing. But in order to emphasise the importance of this sector, the Government must develop a clearer and more explicit medium to long-term strategy for the sector.”
Storer is predicting slower growth for the sector in 2012, and that energy and raw materials costs will remain volatile.
As a result, he said that investment and recruitment by manufacturers keen to protect cashflow will be unlikely – the firm predicts that the balance of manufacturers looking to recruit will fall from a high of 30% in the current quarter to just 7% for the first quarter of next year.
He also said manufacturers need to get to grips with government initiatives such as tax credits designed to spur R&D investment, and added that exports to emerging markets will provide a lifelong for manufacturers as domestic and European markets stutter.
