The latest PMI saw UK manufacturing hit a 25-month low of 52.8 in August, with foreign demand reportedly decreasing for the first time since 2016. Yet, our reader community is telling us the exact opposite.
Tales of a further slowdown in UK manufacturing seem to be rife at the moment, with much of the the national and trade press covering the release of the latest purchasing managers’ index (PMI) this week.
The PMI posted 52.8 in August – down from 53.8 in July. According to the index compilers (IHS Markit and CIPS), manufacturing production rose at the slowest pace in 17 months, new export orders flatlined and the pace of job creation ‘eased to near-stagnation’.
Any score over 50.0 signifies growth and the PMI has shown growth for 25 successive months – although the latest reading is the lowest registered during that period.
But is too much emphasis being placed on the PMI? Does it accurately reflect the reality of what’s happening in UK industry? It is one of the few industrial indices to achieve mainstream media exposure, yet is based solely on questionnaire responses submitted by purchasing managers at 600 industrial companies.
That raises a couple of questions. First, there are approximately 120,000 manufacturing businesses currently operating in the UK (per ONS figures) – so, 600 companies represent just 0.5% of the total market.
Second, and arguably of more importance, the results are drawn from opinion – a metric which can vary wildly from day-to-day depending on a whole host of external factors we may have no insight into. These can range from returning back to work following a pleasant week spent in the south coast of France to suffering a flat tyre on the way into the office or having to deal with a difficult customer.
As an aside, and given the credence many people put into what the PMI reveals, are purchasing managers the most appropriate representatives for what the sector is experiencing? Do they have visibility into sales, exports, R&D and recruitment activities that are arguably a more accurate depiction of what’s going on?
Regardless, at The Manufacturer we prefer to report on what those at the coal-face of industry are saying. As the below stories demonstrate (and it’s worth noting that this only scratches the surface!):
What have manufacturers told us recently?
This Summer, The Manufacturer headed to South Wales to pay Renishaw a visit. The business manufactures highly innovative, complex engineering products that started with precision metrology probes and has more recently encompassed additive manufacturing machines and cutting-edge medical equipment.
Renishaw exports 95% of its output and the 460,000 sqft of space at its facility in Miskin – purchased little more than five years ago – is already half-full. Every year, the business takes on between 60-70 graduates and 50-60 apprentices across eight disciplines.
The Manufacturer also recently dropped in on British Rototherm, a world-leader in the supply of industrial instrumentation and services. The business has a proactive growth-through-acquisition strategy, enabled by its unique internal capabilities.
The approach has the seen the creation of the Rototherm Group, which comprises a growing portfolio of complimentary subsidiaries. Thanks to investments in digital technology, Rototherm has become almost paperless and has recently entered the heady world of IoT.
For more than a century, H. Forman & Son has produced artisan smoked salmon from its site in London’s historic East End. Every day, the business brings in two to three tonnes of Scottish salmon to be hand-filleted, boned, cured, smoked and packaged.
The business has been exporting for more than half a century, with customers in markets as diverse as China, Mauritius and Barbados.
As a precision aerospace components manufacturer, Bromford Industries operates in an ultra-competitive market; but sustained investments in digital technology, factory connectivity and its workforce has seen the business climb to new heights.
Since 2016, more than £7m has been invested in its Birmingham site and a further £5m has been ringfenced for 2018.
Last year, British distillers produced more than 47 million bottles of gin worth £1.2bn. G&J Distiller produce around 250,000 bottles of spirits every day and export to more than 100 countries from Australia to South America and almost everywhere inbetween.
Recent Job creation:
Coventry-based machine tool specialist, Matrix, is looking to double the size of its workforce thanks to relocating to a new site.
Chief operating officer, Paul Farndon told The Manufacturer: “Our current production facilities are at maximum capacity and restricting our growth within the global market. With the new manufacturing facility, we will be able to considerably increase our output and increase our global market share.”
Magtec, Britian’s largest supplier of electric vehicle drive systems, is looking to recruit 20 highly-skilled engineers and managers due to rising demand.
The specialist positions will support the delivery of existing and rapidly growing electric vehicle programmes in the UK and overseas. One example of this is the 7.5 tonne electric refuse collection commercial vehicle currently being tested by the company in Greenwich, London.
Hyperdrive Innovation, a leading independent developer of lithium-ion energy storage technologies is on track to hit £10m turnover this year. Hitting the figure would see the business double last year’s turnover and Hyperdrive expects to double the figure again within the next two years.