Manufacturing 2015: The productivity challenge
PRODUCTIVITY remains a key issue for the manufacturing sector, and while there are encouraging signs of an improvement this year, recent research has highlighted falling confidence.
Earlier this month, data from the Office for National Statistics revealed that productivity across the UK economy rose at its fastest rate in four years in the second quarter. However the good news news coincided with two surveys showing UK manufacturing struggling to maintain growth.
Output per hour (the amount produced by a company after all its costs have been stripped out) rose 0.9% between April and June, the biggest quarter-on-quarter rise in four years.
On the downside though, surveys from the British Chambers of Commerce (BCC) and Markit said confidence among UK manufacturers is “low”, export growth is falling, and jobs are being lost.
The BCC blamed global uncertainty, weakened demand from China and the strength of the pound for the slow down in manufacturing.
Productivity was a theme at a sector round table hosted by international law firm Squire Patton Boggs as part of the North West Manufacturing Review, which can be downloaded HERE . The Yorkshire supplement can be downloaded HERE and the West Midlands edition HERE.
Rob Elvin, managing partner and sector expert at Squire Patton Boggs in Manchester, said: “I think that manufacturers in this region are becoming increasingly sophisticated in the ways that they identify production gains.
“Because of the spirit of entrepreneurship that permeates the region, I think that companies are far more open to new techniques and systems than they might be elsewhere.
“Many of our clients are large manufacturers and I’m also aware of the benefits they enjoy from welcoming employees from other parts of the world who bring different expertise when it comes to increasing productivity.”
Elvin has also seen an “increasing interest” in reshoring over recent years.
“For many companies, it can simply make sense to shorten their supply chain by increasing the amount of manufacturing that takes place in the North West. But my impression is that this movement is not fast, although gaining momentum.”
