A UK-wide survey has found that most North West manufacturers and engineers remain optimistic about future growth, despite the uncertainty surrounding Brexit, rising costs and skills shortages.
The 2018/19 MHA Manufacturing & Engineering Report reveals findings from a survey of over 200 of the MHA association of accountancy firms’ clients and contacts.
Respondents covered a range of companies in the manufacturing and engineering sector, from those with a turnover of less than £1 million to businesses with a significant industry presence.
Key national findings included:
- 71 per cent of manufacturers reported revenue growth in the last year and 70 per cent predicted business growth over the next 12 months
- 50 per cent are looking to increase their capital investment spend in the coming year
- 58 per cent of respondents export products and all exporters currently do so to the Eurozone
- 93 per cent believed their main competitors were based within the UK, with 35 per cent saying they were within their own region
- Only 30 per cent cited Brexit uncertainty and trading tariff concerns as their main barrier to future success
- Just 34 per cent had a strategy in place for post Brexit, with two thirds feeling they could not plan for the impact until they know the government’s final strategy
- 92 per cent believed rising production costs would impact their business next year, but 67 per cent intended to absorb any price increases rather than pass them onto customers. Around half intend to achieve this through improved productivity and efficiency
- 81 per cent of respondents reported problems in finding staff, yet 49 per cent expected to increase payroll numbers over the next year. Out of these, 63 per cent said they would opt for apprentices.
Looking at the North West in isolation, optimism seemed to be even higher than the national average, with 78 per cent of North West respondents expecting growth within the next year.
Also, above the national average, 93 per cent of the region’s respondents said they planned to invest in R&D activities over the next year and 69 per cent planned to take on apprentices or trainees.
Highlighting the findings in the report, Chris Barlow, Head of MHA’s Manufacturing Group, said:
“Perhaps one of the most striking findings from the results of this report is the confidence of the manufacturing and engineering sector and the predictions for growth when there are so many variables in the run up to Brexit.
“The skills shortages, which have impacted the sector for many years, are brought into an even sharper focus by the uncertainties around free movement of workers within the EU. The rising costs of production and distribution, which will be affected by the nature of the UK’s final departure, and the continued currency fluctuations all contribute to a period of significant uncertainty.”
For the latest manufacturing news straight to your inbox, join the Manufacturing Network today.