West Midlands leads the way in SME manufacturer confidence and recruitment intentions

Anna Hayton, MD of Edmar Engineering, a firm that is increasing sales and taking staff on

Small and Medium-sized manufacturers in the West Midlands are outperforming every other region in England according to the latest Manufacturing Barometer.

Produced exclusively for the Business Growth Service, the report shows the area is defying a general drop in confidence by posting an impressive set of results, with 66% of firms recording an improvement in sales over the last six months.

This represents a 12% increase on the previous quarter and is 16% up on the national average.

Three quarters of firms are also predicting future growth (up 6%) and a massive 66% of manufacturers are looking to take on new staff to cope with increases in volume.

“The West Midlands is performing better than the national picture across all performance indicators and that is testimony to the strength and resilience of our manufacturing community,” explained Lorraine Holmes, Area Director of the Business Growth Service.

“This is despite a lot of global uncertainty at the moment, with exchange rate fluctuations, the falling price of oil and China’s economic performance posing significant questions over economic growth.

“Naturally, this cascades its way down the manufacturing supply chain and, whilst there appears to be a lot of confidence about at present, the smaller firms need to plan ahead to make sure they can cope with all scenarios.”

The Manufacturing Barometer reflects the views of over 50 senior leaders running SME manufacturers across the West Midlands, employing approximately 2000 people.

Investing in the skills of their workforce was the other main finding in the report, with 68% of respondents planning to increase spending on developing their people in a bid to unlock the ‘productivity puzzle’.

This outstrips the desire from companies to achieve productivity gains through increased investment in new capital equipment and machinery (66%) or implementing computer software and systems (51%)

“The race to improve productivity has been widely discussed over the past twelve months and the findings of the Manufacturing Barometer clearly show that the majority of smaller manufacturers in the region are prepared to increase spending to gain better performance,” continued Lorraine.

“What is perhaps a little surprising is that increasing investment in skills is seen as a greater priority than capital and machinery. This shows the importance firms appear to be placing on ensuring they have the right people to grow their business and this spans from retaining key staff and employing apprentices, to continuously improving existing employees.”

She concluded: “Our Business Growth Managers on the ground are also reporting a rise in the number of manufacturers requesting support for leadership and management training to help with strategy, succession planning and entering new markets.

“This is something we can provide funding for through the Business Growth Service.”

The Business Growth Service brings together GrowthAccelerator and the Manufacturing Advisory Service, with additional elements from the Intellectual Property Office (Intellectual Property Audits) and the Design Council (Design Mentoring).

It also refers SME manufacturers to the right support provided by other agencies, including UK Trade & Investment, Innovate UK (including High Value Manufacturing Catapults), the British Business Bank, local Growth Hubs and UK Export Finance.