MHA MacIntyre Hudson and Lloyds Bank Plc have launched their much anticipated Manufacturing Survey Report for 2017/18.
The Midlands results show that overall attitudes remain positive and demonstrate an upturn in optimism this last 12 months along with continued growth. Nearly 79 per cent of respondents were forecasting growth of up to 10 per cent, driven by increased demand, a rise of six per cent on the previous year. This comes after another successful year for the majority of respondents with almost 70 per cent having seen their businesses grow over the last 12 months.
Richard Powell, Partner and Head of Manufacturing at the firm’s Northampton office, said: “This is positive news for the UK manufacturing sector – and for UK industry as a whole. It’s reassuring to see the sector on such a firm footing despite a number of recent uncertainties. Businesses must now build on the progress being made in the current market and plan ahead to navigate increasing inflationary pressures and the various obstacles and opportunities presented by Brexit.”
The main challenges identified by respondents were raising the capital investment required for the push towards automation and increased production costs due to raw material price increases and expected wage growth.
With regards to Brexit, the good news is that the majority of businesses have a strategy for Brexit in place. 43 per cent believe that Brexit will have a limited impact, with 15 per cent claiming that Brexit will have an extensive impact on their businesses.
In terms of retaining and recruiting staff, 22 per cent of businesses have lost staff as a result of the referendum result. This is being put down to uncertainty with regards to EU workers’ rights, making it even more challenging to deliver growth against the difficulty of recruiting and keeping the right staff.
Richard Jenkins, area director for manufacturing in the Midlands at Lloyds Banking Group, said: “The Midlands is at the heart of the UK’s manufacturing excellence and many of our businesses are leading the way in creating future opportunities for growth. Though some businesses reported difficulties presented by a shortage of skilled staff and rising input costs, overall, Midlands manufacturers feel positive about their future prospects.”
The survey also highlights things which businesses are not making the most of, including:
* R&D Tax Credits – Surprisingly a third of respondents had not made a claim in the last 12 months and 41 per cent (an increase of around seven per cent) did not anticipate making a claim in the next 12 months. Given that companies gain significant benefit from R&D claims this remains an area of concern.
* The Apprenticeship Levy – 62 per cent of businesses have no strategy in place or do not understand access to the apprentice levy funding.
* 61 per cent reported that they had received no government funding or grants during the last year and only 20 per cent felt that they could access anything.