A survey of SME manufacturers has found that many are being squeezed between low demand and weak supply chains, with the furniture, software and general engineering sectors the worst affected.
The Manufacturing Growth Programme (MGP), which supports SME manufacturers in several regions outside of the North West, asked nearly 300 small manufacturers about their experiences since the COVID-19 outbreak.
Nearly two thirds (64 per cent) had seen orders drop and 59 per cent had experienced issues with suppliers. Two fifths had faced an increase in the cost of products, materials or services, and 65 per cent said delivery times had lengthened.
The furniture sector was the most negatively impacted in terms of orders, while food and drink was the least affected.
Martin Coats, Managing Director at the MGP, commented:
“The results raise important questions about resilience, both up and downstream for small manufacturers, particularly given the uncertainties in the economy.
“Everyone was aware of the drop in orders due to the national lockdown and global issues, but what hasn’t been so well documented is the production issues some companies are facing and how disruption is causing major issues with pricing, costs and delivery performance.”
However, not all businesses have struggled. Just over a fifth of respondents said they had experienced an increase in orders during the pandemic. Micro businesses (less than 10 employees) and those not highly dependent on exports were marginally more likely to fall into this category.
Martin Coats added:
“There were some positives in the findings about the resilience of our manufacturers. 21 per cent of them have actually increased their order books during the pandemic and, of those, 62 per cent had diversified into new markets and just over half had introduced new products.
“This shows the strength of our supply chain and the ability to innovate and this is what we need to encourage.”
Our new online support programme, Made for Manufacturing, has been launched to help manufacturers into the best possible position for the future.