South West manufacturers are showing some signs of growth and forecasts for increased investment, but this is tempered with a fall in enquiry levels, according to the latest South West Barometer from the Manufacturing Advisory Service (MAS).
Over half (53%) of respondents reported an increase in sales turnover over the past six months, representing a small but positive rise from 51% in the last quarter. Planned investment in new technology is also rising, with nearly a third (31%) of respondents indicating that they would look to increase this in the next six months. However, while over a third of manufacturers (34%) indicated that enquiry levels have increased compared with six months ago, this is a significant fall from 50% in the last quarter.
Commenting on the findings, Simon Howes, MAS Area Director for South England, said: “We are not surprised that the latest barometer reveals variations in both results and future predictions given the recent economic forecasts. While it is reassuring to see that there are still signs of moderate growth and expansion for South West manufacturers, the fall in enquiry levels puts into focus the importance of continual innovation in order to generate new leads. It will be interesting to see if the increase in figures for planned investment in new technology has an influence on order book levels in the next quarter.”
One contributing manufacturer that has worked with MAS, Gloucestershire-based Vision Profiles Ltd, has increased its turnover in the last six months, and is also forecasting to increase its investment in new technology in the next six months.
The company has doubled its workforce in the last two years and strengthened relationships with its existing customers, as well as growing into new markets, after investing around £800,000 in new machinery in the past 18 months.
Alan Grady, Managing Director and Owner, said: “On the ground business is much better than is being reported and I sometimes wonder if it is the ‘merchants of doom’ that are making the consumer lose confidence. Things may not be easy for everyone but we have found that business is out there if you are committed to go looking for it. The key for us has been focusing specifically on what our customers want and providing a high quality of service. Due to our recent growth we are now looking to move into new premises, doubling the size of our current operation.”
Another contributing manufacturer that has worked with MAS, Devon-based Westaway Sausages Ltd, has experienced similarly positive results. The company has taken on seven new members of staff in the last year and invested £500,000 in new machinery. It was also named ‘Small Processing Business of the Year’ at this year’s Meat and Poultry Processing Awards.
Charles Baughan, Managing Director, said: “We closely analyse where our sales are coming from to ensure that we are operating in the right markets and at the best margins. Every enquiry we receive is treated with a positive belief that it could result in a new business lead and this gives us real credibility within our sector. Sales with our core customers have increased by 15% but we are also exporting to five more countries than we were this time last year. Investment and a strong company ethos are critical to success in the current economic climate and we are constantly looking at how we can grow our business.”
The barometer has also revealed encouraging news around employment, with just over a third of the companies surveyed looking to create new jobs and 59% expecting staff numbers to stay the same. This positive news is reflected by other recent reports, with figures from Markit and the Chartered Institute of Purchasing & Supply’s (CIPS) latest index survey revealing that manufacturing employment rose slightly for the first time in three months during July. Similarly, CBI’s latest quarterly SME Trends Survey revealed that SMEs increased headcount in the quarter to July by 11%, supporting previous MAS barometer predictions.
Business Minister Mark Prisk said: “The Government is committed to helping manufacturers make the most of the opportunities for growth and job creation through our continued investment in MAS.”