Business is improving for the region’s manufacturers, according to the latest quarterly South West Manufacturing Barometer.
The survey, carried out by the Manufacturing Advisory Service in the South West (MAS-SW), says that manufacturers are reporting increased turnover, a stabilisation of their work force, and an increased awareness of the emerging low carbon economy.
Of the manufacturers surveyed, 75% experienced either an increase or a constant level of turnover in the past six months. In addition, 58% reported an 8% increase in order books compared to the last barometer, suggesting that buying confidence is also increasing.
A comparison of results across the Barometer surveys to date shows that there has, for the first time, been a drop in expectations in both sales turnover and in staff numbers over the next six months. This indicates that despite the recent growth seen by manufacturers, the future is being met with cautious optimism and lower expectations.
“The change in the attitudes of manufacturers to future investment and the emerging low carbon economy is encouraging”
The findings also reveal that manufacturers are making a step-change from looking at business improvement reviews which were essential during the recession, and looking forward at investing and developing their businesses:
- The number of companies looking to maintain or increase their investment in new technology stands at 98%. Of these manufacturers, 36% are looking to increase their spend on technology – a figure which has increased over the last three quarterly surveys.
- 79% of respondents said they expect the low carbon economy to have no impact on their business, a significant reduction from the 90% of respondents indicating the same in the last survey.
Additional feedback from manufacturers has reinforced a positive attitude to recovery and the future of their businesses. A leading hydraulics manufacturer commented: “As a large percentage of our business is export, and Asia is prominent we have not suffered greatly from the recession.”
This underlines that export markets are presenting more and more opportunities for manufacturers in the south west. Many are remaining cautious however, with issues such as the VAT rise in January 2011, the lack of skilled workers, and rising fuel prices all contributing to their concerns.
Simon Howes, business development director for MAS-SW said: “The change in the attitudes of manufacturers to future investment and the emerging low carbon economy is encouraging for the future of the industry.
“Stabilising job levels and growth in sales turnover figures provide a grounded base for the industry to move forward in the south west but we know that growth in employment can lag behind increasing output, particularly following a recession.”