While the progress of the UK’s exit from the European Union is weighing on businesses in all sectors of the country, the latest survey of the performance of British manufacturing and engineering firms shows a broadly positive picture for the sector.
The annual MHA Manufacturing and Engineering Report 2017/18 has been released and shows that the majority of firms in these areas experienced growth in the past 12 months, with many optimistic about what the future will bring.
Despite the uncertainty being caused by Brexit, 78 per cent of those surveyed predicted that their businesses will grow in the coming year, and 57 per cent said that they expect to increase the number of staff they employ in the next 12 months.
The biggest concerns come from a skills shortage though, with 75 per cent of the firms questioned stating that finding suitably qualified staff is one of their biggest issues. Brexit could exacerbate that problem, as 20 per cent of firms said they had already lost or were at risk of losing staff following the vote to leave the EU.
In fact, 22 per cent of the businesses involved in the survey said skills shortages were their biggest worry for the coming year. Many want to see the government invest in better training for manufacturing and engineering roles, covering everything from secondary education to further and higher education.
There is evidence elsewhere to suggest that the UK manufacturing industry is performing well. Data from the latest IHS Markit/Chartered Institute of Procurement and Supply (CIPS) Purchasing Managers’ Index (PMI) found that the industry performed better in August than in July.
According to the PMI, production rose at its fastest rate in seven months in August, largely supported by faster intakes of work.
There was growth in the number of contract wins in the domestic market, but the export sector also continued to perform well, helped by weak sterling.
Companies reported a rise in the amount of business they were doing with mainland Europe, as well as China, the USA and Australia. And it isn’t only large firms that are doing well, small and medium-sized enterprises also posted growth last month.
As a result, business optimism hit a three-month high, and more than half of the businesses surveyed said that they expect their output to be higher one year from now.
Director at IHS Markit Rob Dobson said that the question now is whether this growth can be sustained going forward. “This is looking increasingly likely during the near-term, given the breadth of the expansion,” he asserted.
Mr Dobson added: “Business conditions improved across the three main subsectors – consumer, intermediate and investment goods – and at smaller and large-scale producers alike.”
The MHA survey also found that 92 per cent of respondents consider Industry 4.0 to be an opportunity for their business, indicating that more firms could focus on this area in the future.
If you need to work with industrial gear manufacturers to help expand your business, get in touch with us today to find out more about the services we offer.