Manufacturing Growth: Plenty of reasons to be optimistic

MANUFACTURERS in the Midlands have a great deal to be optimistic about despite the difficult economic climate, sector specialists have said.

However, certain inhibiting factors remain to be overcome before the long-term future of the sector can be guaranteed.

Maximising opportunities available in the emerging markets, better access to affordable finance, a sustainable skilled workforce and innovative use of new technology all occupy the thoughts of those in the industry and all have a bearing on growth prospects.

This week, TheBusinessDesk.com, in association with DLA Piper and Deloitte is taking an in-depth look at the region’s manufacturing sector and identifying areas of potential growth.

David Raistrick, partner and head of manufacturing for the UK and Switzerland at Deloitte, said: “I am incredibly confident about the future – it’s looking bright. We have the skills needed (in greater abundance than many parts of the world), we have established R&D centres in major manufacturers across the UK and we develop technology-advanced products that are in high demand in the rest of the world.”

To read more about growth in the Midlands manufacturing sector downoad a free copy of our special supplment Manufacturing – How best to secure growth for the region

Andrew Church, managing director of Nuneaton-based JJ Churchill, said his firm operated in key sectors such as aerospace, defence, industrial and power generation, therefore it was critical he had the necessary skills in order to meet the requirements of his customers.

“We are increasing our apprenticeship programme because I spend millions on new machinery and I want to know that I will have the skills there in the future to operate them,” he said.

One of the main inhibitors to growth is seen as an inability by SMEs to access the finance they need in order to develop.

Many have blamed the banks for not lending in the same volumes as they did; the banks say the money is there, it is just that a lot of firms are too scared to ask for it either because they are unwilling to take on more debt or think they will be turned down anyway.

Sadly, the climate of fear which now envelops the sector means growth is stagnating and firms are struggling to sustain their business.

Noel Haywood, partner at DLA Piper, said firms looking to maximise their growth strategies should now be looking to the emerging markets for new opportunities.

“By exploring emerging markets, UK-based manufacturing companies have an opportunity to extend their products/services and diversify their source of sales,” he said.

“In strict economic theory, the weakness of the pound, exacerbated by further quantitative easing, should give UK-based companies an increased competitiveness in export markets, but there is a narrowing window of opportunity for companies to exploit this.”

Peter Gallimore, Midlands’ manufacturing leader at Deloitte, said: “There is no denying that the recession and continuing financial crisis have had a considerable impact on UK manufacturing.

“Despite this, qualified optimism remains – both in the sector itself and the wider business community – with the Midlands yet again leading the way as it continues to buck national and global trends.”