Small and medium sized manufacturers (SMEs) in London and the South East are defying predictions of a slowdown by reporting increases in current and predicted sales.
57% of the regional respondents to the latest Manufacturing Barometer* have indicated that their turnover has continued to increase which is the same reported a year ago. Over two thirds (72%) expect further increases over the next quarter which is higher than the national response of 70%.
In further positive news, over half of firms (53%) are still looking to recruit and 58% said they were planning to increase investment in new technology, a 9% increase on the last quarter and the highest figure recorded in the six-year history of the Barometer indicating a movement towards more advanced manufacturing.
Hampshire-based GW Martin Machining Specialists supply machined components and assemblies to the aerospace, defence, automotive and electrical industries in the UK and overseas. Stuart Yalden, Managing Director says: “We are positive about the future and pleased to report a healthy order book to take us well into the next year. This gives us the confidence to commit to our investment strategy to develop the business with new equipment and systems, and importantly investment in the skills of our team.”
The specialist topic this time was ‘identifying barriers to growth’. Responses revealed that the burden of regulation and the pressure of paying higher salaries are the two main concerns for London and the South East SME manufacturing base.
Roger Churchill, MD of Lohmann Technologies UK Ltd in Buckinghamshire, who provide high-tech bonding solutions for manufacturers says: “Lohmann has seen continuous expansion since 2009, yielding a CAGR of 17.39% on sales growth. This has been achieved by continuous investment in people, machinery and buildings, allowing for future growth. The future looks very positive, with a strategic plan to double our business again over the next six years, but there are always risks and we are very focused on ensuring we deliver what our customers’ need, on time and in full.”
Business Minister Matthew Hancock commented: “Small businesses have been at the forefront of our economic recovery and the findings show no sign this is slowing down. We are committed to making Britain the best place in the world to start and grow a business, which means backing manufacturers every step of the way. Our long-term economic plan is delivering and it’s clear that manufacturers are leading the way.”
Surrey-based Acro Aircraft Seating is an aerospace engineering company specializing in aircraft seating. Chris Poland, Operations Director says: “Business is booming at Acro. We recently added 25 jobs and have moved to a larger facility. Although we export over 80 % of our sales, 95% of our purchasing spend is UK based and we intend to keep it this way. A strong UK economy and supply base will continue to be vital to our expansion plans.”
Steven Barr, Head of Manufacturing at the Business Growth Service, commented: “There have been concerns that manufacturing is slowing down, and GDP figures from the Office for National Statistics did indeed reveal a slight decline. However this is not the case for SMEs.
“Record investment plans in technology from these manufacturers are welcomed. This shows they recognise the need to spend to compete globally, to offer unique processes and technologies to establish themselves on the added value chain. Any slowdown by the bigger manufacturers will take a while to cascade down the supply chain and we have to be mindful that there might be a delayed reaction to the predicted slowdown. At the moment though the news is very positive.”
Sussex-based Drallim Industries producers of specialist engineering equipment for the aerospace, industrial and utilities market has increased their workforce recently by 20% reflecting the strengthening economy. David Mooney, MD says “We are very proud to be a British manufacturing company and we intend to continue growing providing local jobs and contributing to returning the UK’s manufacturing status to “Great Britain.”
The Barometer is the largest survey of its kind, reflecting the views of 546 SME manufacturers across England, employing over 16,000 people. The London and the South East response represented the views of 144 manufacturers.
The Business Growth Service, launched in December 2014 by the Department for Business, Innovation and Skills, brings together GrowthAccelerator and the Manufacturing Advisory Service, with additional elements from the Intellectual Property Office (Intellectual Property Audits) and the Design Council (Design Mentoring). The manufacturing offer is closely aligned with GROW:OffshoreWind and Fit for Nuclear (F4N), the latter delivered by the Nuclear AMRC (NAMRC).
The Business Growth Service also refers SME manufacturers to the right support provided by other agencies, including UK Trade & Investment, Innovate UK (including High Value Manufacturing Catapults), the British Business Bank, local Growth Hubs and UK Export Finance.