MHA MacIntyre Hudson and Lloyds Bank Plc have now launched the latest Manufacturing Survey Report for 2019. The survey details that overall UK small and medium-sized enterprises (SME) manufacturers remain optimistic and confident about future growth, despite Brexit uncertainty, rising production costs and skill shortages, with 71% of respondents having achieved revenue growth during this last year compared with 65% the year before.
Despite concerns about the impact of Brexit, this year’s results show that manufacturers and engineers in the London and South East region are more optimistic than last year, with 80% predicting growth, which is up 5% in a year.
90% of companies surveyed in the region are investing in R&D, which is 2% above the national average of 88%. 48% of respondents are anticipating increasing staff numbers in the next 12 months, not including taking on new apprentices.
However, 48% of respondents have had difficulty recruiting staff with relevant skills. Therefore, it is not surprising that expanding skills training for the future work-force was the highest ranked action the government could take to help businesses in the region.
Atul Kariya, Manufacturing and Engineering Sector Head and Partner at accountants and business advisors, MHA MacIntyre Hudson, said, The sector continues to grow and maintain a positive attitude despite current uncertainties and challenges. The sector once again has demonstrated how resilient it is by outperforming most forecasts this last year. It is a key sector for this country and therefore we must do our utmost to ensure it thrives in future years. . Part of doing this must be to work together as an industry to encourage the next generation to work in the M&E sector. It is an innovative industry so therefore we should be innovative in our thinking to achieve this!
Interestingly only 34% of respondents have a Brexit Strategy in place with 66% feeling that they cannot plan for the impact until they know the governments strategy and the EU’s response.
Other key points nationally from the survey include:
• 51% have high or above average business expectations over the next 12 months (increasing to 54% over the next three years) and 50% are looking to increase their capital investment spend in the coming year.
• 58% of respondents export products and all exporters currently do so to the Eurozone.
• 93% believe their main competitors are based within the UK and 35% agree they’re within their own region.
• 92% believe rising production costs will impact their business next year, but in a positive move, 67% intend to absorb any price increases, rather than pass them onto customers, and 52% intend to achieve this through improved productivity and efficiency.
The manufacturing and engineering survey - compiled by MHA, the UK-wide group of accountancy and business firms and supported by Lloyds Bank Commercial Banking in association with the Institution of Mechanical Engineers – reveals a buoyant sector that’s not letting political and economic uncertainty drag it down.