Once again, the experts from The Manufacturers’ Organisation, joined by the team at BDO Manufacturing, have come together to produce their quarterly survey on the UK Manufacturing industry. The report has revealed some key insights into the UK’s varied Manufacturing sectors, with an enduring optimism in spite of economic uncertainty. With key considerations into output, exports, investment and employment, TS Grale took a look at the figures from a national and regional perspective.
With 2.7 million UK employees, and £240 billion of exports, the overall outlook for UK Manufacturing in Q2 2017 was generally positive – however, this optimism needs to be shared by the Government. The report notes that Manufacturing in the UK, despite its vast contributions to the economy, is not considered a “critical sector”, and more investment is needed if we are to make the most of Industry 4.0.
TS Grale shares this sentiment; we believe the Government needs to invest in people as heavily as it will in technology. As we noted in our digitisation challenges article, now is the time to start looking out for fresh young talent which can be nurtured to flourish in line with changing production methods and job roles.
A cautious approach should be taken towards output this quarter; as the report reveals, output growth has been confirmed in the last six months compared to last year, but this has slowed in Q2. The automotive sector has experienced a slowdown in growth after ending 2016 on a high, while domestic orders took a hit due to decreased consumer spending.
However, we can see potential for improvement: advancements in technology are seeing firms like Coventry-based London Taxi Company going electric, whilst electronics and electrical equipment output is on the up. TS Grale also recently commented on upward trends in the aerospace industry – this is evidenced by the recently announced Boeing factory set to open in Sheffield, and a surge in profits at Derby-based Rolls-Royce. Once again, technology is at the forefront of these developments, and we believe UK Manufacturing can prosper by focusing on this going forward.
Whilst UK orders appear to have suffered somewhat in the last three months, global investment has given rise to renewed optimism in Manufacturing export orders. We believe that UK Manufacturing is making the most of the Brexit vote, leveraging the weaker pound to increase exports and put Britain on the map as a global trader. This is reflected in the statistics: the report revealed that the last quarter saw the largest quarter on quarter gain in the survey’s history, a trend which has continued into Q2. This is largely due to a recovery in global investment, again, with a particular focus on electronics. The UK should position itself as a leader in electronics Manufacturing to continue this upward trend.
Employment and investment
As executive recruiters, employment was a focal point in the survey for TS Grale. The industry has suffered many challenges of late including skills shortages, technological advances and economic uncertainty, and yet it has shown its resilience through the latest figures. In line with increasing demand, manufacturers are taking on more employees – in fact, in this quarter, the total number soared to its highest level since 2014.
Again, electrical equipment manufacturers came out on top, with 21 per cent of manufacturers across all sectors reporting an increased headcount in the last three months. At TS Grale, we’re hugely proud of these results from UK Manufacturing, particularly in the light of industry challenges, and expect the trends to continue into Q3. We also expect investment to show slow but positive growth, particularly as the pound stabilises and inflationary pressures decrease.
Whilst TS Grale has a national focus, as a Leeds headquartered executive search firm, we thought it pertinent to have a quick glance at the Yorkshire region. Business confidence is at a healthy 6.8, but we need to work hard to turn around the current downward trends of employment, output and investment. Despite the trends, business confidence for Yorkshire is the joint highest in the UK, together with London and the South East. We consider this a testament to Yorkshire’s unwavering work ethic and a positive belief that there are many irons in the fire for Yorkshire-based manufacturers. The aforementioned Boeing factory, for example, will bring £20 million of investment into the county, while stations in Leeds and Sheffield for the proposed high speed rail routes will bring about thousands of job opportunities in the long-term.
TS Grale would like to extend our thanks to The Manufacturers’ Organisation for providing the data for this report. You can view the report here.
TS Grale are an executive manufacturing recruitment company based in Leeds. I wrote a series of blogs for them throughout 2017 commenting on industry trends.
- Categories:Small Business Owners