Small to medium sized (SME) manufacturers in the South West have reported significant signs of growth compared to this time last year, according to the latest Barometer from the Manufacturing Advisory Service (MAS).
From this time last year, there has been a 24 per cent increase in the number of respondents reporting receiving more enquiries. This figure now stands at 58 per cent, which also represents an impressive rise of 15 per cent from the previous quarter.
Similarly, over half (56 per cent) of companies reported that their order books had increased in the last six months, which is a rise of seven per cent from the same period last year.
Simon Howes, MAS Area Director for South West England, said: “Our latest barometer results echo the rise in optimism within the manufacturing sector evidenced by the latest ONS figures, which revealed manufacturing output grew at its highest rate since 2010, and the 28-month high of the last Markit/CIPS UK Manufacturing PMI®. The findings suggest that the manufacturing sector is starting to show important signs of growth.”
Business and Energy Minister Michael Fallon said: “These findings are the latest indication that the economy is starting to head in the right direction, as we move from rescue to recovery. It is particularly encouraging to see that confidence is returning and manufacturers are becoming more optimistic about their future growth.”
The Barometer also reports upbeat forecasts for the next six months, with over two thirds (68 per cent) of businesses anticipating an increase in turnover. This is 17 per cent up on the same time last year and reflects the confidence gained from stronger order books and higher enquiry levels. Investment plans are also positive, with a rise in the number of companies expecting to allocate funds towards new machinery / premises and technology.
Simon Howes added: “While the trading environment remains challenging, it is particularly welcome to see signs of growth and optimism from South West manufacturers. This suggests that some have already begun capitalising on opportunities to expand their operations, while the positive investment intentions could indicate that other companies may be looking to do likewise.
“Compared to this time last year, plans to recruit are also positive. However, there does appear to be a more cautious approach from manufacturers when compared with the slightly higher numbers reported last quarter. This is understandable but it is important that recruitment plans are aligned with growth forecasts, to ensure that businesses do not find themselves in the position of being unable to recruit enough skilled workers. A lack of skilled capacity could directly impede growth once the recovery really starts to kick in.
“MAS can help businesses committed to growth and innovation through our network of experienced advisors who can work with manufacturers at a strategic level to develop a roadmap that looks at both strategy and the processes required for creating new products.
“We can assist with the whole product development phase from design, prototyping and validation to certification requirements. MAS advisors are also equally at home working with shop-floor teams to improve productivity and help maximise profitability in their own business and supply chains.”