28 Feb 2019
Review of the latest manufacturing and engineering report
The manufacturing and engineering industries are a backbone of our economy and ones that, as part of MHA, we keep a close eye on. Each year as a group, supported by Lloyds Bank, we publish a nation-wide insight into the sector through our Manufacturing and Engineering Annual Report. As part of this, we have spoken to over 200 businesses ranging from those with a turnover of less than £1million to big players of global importance to find out where their concerns and opportunities lie.
Recently we’ve been rocked in the region by Honda’s announcement and together with the uncertain political situation we’re still experiencing, there has never been a more important time for the industry.
However, how are we doing – both on a national and regional scale?
Nationally, despite uncertainty surrounding Brexit, manufacturers are optimistic with 70% predicting business growth in the next 12 months – however, almost a third (30%) of those questioned said that Brexit was their main barrier to growth, and two thirds (66%) do not yet have a Brexit strategy in place as they feel they cannot plan until the government’s strategy, and the EU’s response, is known.
Skills is also still high on the agenda, with almost a fifth (19%) reporting that difficulties in recruiting appropriately skilled staff is also a barrier to growth and that 60% of businesses would like to see government action on expanding skills training for the future workforce.
Improving productivity and efficiency, including the increased use of automation, is the way that many manufacturers see their businesses surviving, with 52% of those asked planning to absorb price increases in this way. A fifth of firms predict they could automate up to 50% of their manual processes over the next ten years.
Here in the South West the view is more optimistic, with 73% of respondents forecasting growth, which is down 7% from last year compared to 8% nationally. We’re still experiencing the ongoing struggle to recruit skilled staff as 50% of businesses confirmed to us that there is still a shortage of applicants with the relevant skills.
But we’re not a region to without a plan as businesses in the South West are coping by way of a number of strategies, including investment in existing staff such as training, providing staff benefits and/or production bonuses. New ways of working are also a focus with many implementing lean manufacturing or looking to automation, as well as investing in updated machinery.
To read the full report, click here
To discuss the report or anything else, please call me on 01793 818300 or emailIain.Black@monahans.co.uk.