Region’s manufacturers see mixed start to the year

Manufacturers in the North West have seen a mixed start to the year, with continued difficult conditions being experienced by the automotive and aerospace sectors with which the region has significant exposure.

According to the latest quarterly Manufacturing Outlook survey from Make UK and business advisory firm BDO, output in the region was flat at a balance of +0% compared to the last quarter, while orders for both the UK and domestic markets were low by historical standards in balances of just +10% and +13% respectively.

This mixed performance is reflected in the jobs outlook with recruitment intentions in the North West falling compared to the last quarter – the only UK region where this is the case. Meanwhile investment intentions are only just in positive territory.

As with the national picture, the big challenge for companies, in addition to attracting and retaining talent, remains the escalating inflationary pressures which are forcing companies to raise prices at record levels for the fifth successive quarter.

In response to the rapidly escalating costs, Make UK is urging the Chancellor to use next week’s Spring Statement to take whatever measures are necessary to support companies dealing with rapidly increasing energy prices in particular. Make UK has called on the Chancellor to delay the proposed increase in National Insurance due to come in April.

Make UK has forecast growth for manufacturing in 2022 of +3%.

Dawn Huntrod, region director for Make UK in the North, said: “Manufacturers in the North West have seen a mixed start to the year given the continuing difficulties being experienced by the aerospace and automotive sectors. Companies are also now facing eye watering increases in costs which are threatening to stop the economy in its tracks. As a result, the most immediate priority for the Chancellor in the short-term must be to use his Statement to do whatever it takes to support companies through this difficult period.”

Graham Ellis, head of manufacturing at BDO in the North West, said: “North West manufacturers are feeling the pressure, and that’s being compounded by flat order and output balances this quarter.

“Costs are rising at a speed that they cannot respond quick enough to and, combined with supply chain disruptions and the uphill struggle for skills, manufacturers will be looking to the Chancellor for immediate action.”