South West manufacturers bullish on economic prospects
Manufacturers in the South West are bullish about their prospects in the coming year despite ongoing cost pressures, according to new research by specialist business advisory firm FRP.
More than nine in 10 (96 per cent) of the manufacturers surveyed by FRP in the region are expecting to see demand for their products increase in the next 12 months – almost 10 percentage points higher than the national average of 87 cent – while the vast majority (92 per cent) are confident that they will be able to continue trading over the same period.
Sector leaders are also convinced by the robustness of their supply chains, with the vast majority (84%) also expecting suppliers to continue trading successfully through the year ahead.
The research features in a new national FRP report, Against the odds: The future of UK manufacturing, which points to a resilient sector that is looking to invest in advanced technologies to help stimulate new growth. FRP conducted a similar study at the end of 2022, which found that manufacturers were far less optimistic about their prospects.
Manufacturing is a key driver of growth in the South West, with the aerospace and defence sectors both having a particularly strong presence in the region. Notable manufacturers based in the area include Airbus Operations, Leonardo Helicopters and Cobham.
With inflation beginning to ease, almost nine in 10 (88 per cent) of FRP’s respondents in the South West – which range from SMEs to major employers – are planning to invest the same amount or more than they did last year. The top investment priority amongst respondents is to upsize operations, with just under a quarter (24 per cent) labelling both increasing production capacity and expanding logistics operations as their prime concerns.
Still, challenges remain – chiefly increasing material costs (33 per cent) and the cost of energy (31 per cent).
In response, manufacturers are planning a range of measures including increasing prices for customers and distributors (40 per cent), and – more positively – introducing or expanding the use of automation or AI in production (38 per cent). While just over one in 10 (13 per cent) say they are already using AI, machine learning or automation to its full potential, just over half (52 per cent) believe there is the potential to apply it more widely in their organisation.
