SME manufacturers in the region are more confident around revenue growth, despite Brexit uncertainties, skills shortages and production cost rises. So says this year’s MHA Manufacturing & Engineering annual survey report which is supported by Lloyds Bank Commercial Banking and which will be the subject of the next Manufacturing Engineering & Technology Alliance (METALL) meeting on October 19th at South Lodge Hotel, Horsham.
Philippa Oldham, who heads Manufacturing and Transport for the Institution of Mechanical Engineers, will pull out the main findings of this year’s report with particular reference to the South Coast and Gatwick Diamond. As ever, Philippa will also be looking into the crystal ball and bringing to bear her experience and knowledge of Westminster to give insight into government thinking and the likely next move around the Industrial Strategy.
Amongst this year’s finding were that:
- 69% of manufacturers reported revenue growth over last 12 months – up 10% from last year.
- 78% of manufacturing businesses predicting revenue growth over the next 12 months.
- 94% expect further increase in production costs and a growing number of businesses see these being passed to customers.
- Brexit uncertainty is a significant barrier to growth.
- Nationally, 20% of respondents stated that they have lost staff or are at risk of losing staff from the EU because of Brexit. Locally, the figure is closer to 30%.
- Three quarters of manufacturers say they cannot recruit appropriately skilled staff and have called for government action to expand skills training at all levels of education.
- Manufacturers are starting to understand Industry 4.0 opportunities and are looking to government for more tax breaks to help them to accelerate the necessary investment.
At the last METALL meeting, when Sir John O’Reilly was joined by Maggie Philbin and Professor Andrew Lloyd, the ability of businesses to find and recruit suitably skilled staff was identified as one of the main barriers to achieving business growth over the next 12 months, a problem compounded by staff losses as a consequence of Brexit. This factor sat above more general concerns and uncertainty around Brexit and its impact on the future trading environment and, more broadly, global economic conditions.
MHA Carpenter Box Partner, Chris Coopey, who heads the Manufacturing Group at MHA, said of the report findings:
“The resilience and optimism of our manufacturers and engineers highlighted by our survey is a massive positive for the UK in this most uncertain of worlds. Despite the challenges they face, such as skills shortages and the increasing costs of raw materials and components due to the large drop in the value of the pound, the sector remains buoyant.
The skills shortage is already being exacerbated by the loss of both skilled and unskilled staff from the EU. Though apprenticeships are becoming more popular, they will not match demand, so we need to make more using less labour by utilising technology. The fact that the principles around Industry 4.0 are beginning to figure in the sector’s thinking is therefore very good news. Investment seems to be the key to the conundrum of skills shortages and rising costs.
By providing the right incentives, government has a key role to play in supporting and promoting the investment in automation, innovation and skills development that we need. With the finance sector in London at real risk post Brexit, the manufacturing and engineering sector should be front and centre of the government’s thinking if the UK’s economy is to thrive and grow. It’s therefore no surprise that businesses are keen to see a serious effort by Westminster to really commit to driving an ambitious Industrial Strategy forward.”
METALL is a free to attend forum for manufacturers and engineers and is sponsored by MHA Carpenter Box, asb law and CBSbutler. For more details and to sign up, visit METALL.org.uk.