Manufacturers poised to fill growth gap, says report
NORTH West manufacturers are poised to fill the growth gap caused by the shrinking public sector, according to a new report.
The Engineering Employer’s Federation published the results of a survey of more than 300 manufacturers in the region which shows that it is growing at its fastest rate since 1994.
The report, titled The Shape of British Industry, also said that 69% of firms in to grow by increasing capital investment in their businesses and 76% plan to increase innovation efforts.
The North West is the biggest manufacturing region in the UK with almost 15,000 companies employing almost 350,000 people. Output in the region is worth £21.1bn out of a UK total of £155bn.
However, the report argues that the sector would benefit from a government strategy which helps to overcome the growth barriers that companies face and to grow the next generation of large global players.
It argues that there is a disparity between the UK and major competitors such as Germany and the US in terms of the number of large manufacturing firms. Germany has more than twice as many manufacturers with 250 or more employees and the proportion of companies with more than 250 employees is also much higher – 2.1%, compared with 1.2% in the UK.
Firms employing 500 or more staff make up just 0.6% of the UK’s manufacturing base, compared with 2.9% in the US.
EEF North West region director, David Ost, said: “Manufacturing is well placed to fill the growth gap and make the investments in innovation and skills that will drive our economy forward and create new jobs.
“But this will only happen if there is a genuine partnership with government that helps companies of all sizes and growth stages to overcome the barriers that they currently face to growth.
“Whilst the current attention on young businesses and start-ups is helpful we must not ignore the wider benefits to the economy that larger companies bring.
“The UK doesn’t just need a handful of larger companies over the next decade; we need hundreds of them with the scale and muscle to tackle our economic challenges. Otherwise, we risk placing a speed limit on our growth potential.”
The report argued that larger companies were at the heart of efforts to create more collaborative and efficient supply chains, as well as driving new product development.
