English manufacturers expect growth says MAS Barometer

Posted on 26 Feb 2013

Figures released today show English manufacturing SMEs are optimistic for growth in 2013, reinforcing recent economic forecasts predicting an upturn in the sector.

The latest Manufacturing Advisory Service (MAS) Barometer reveals that 43% of companies questioned have seen an increase in their order books over the past six months (+4% on the previous survey), with a massive 62% expecting sales turnover to grow between now and June 2013.

The predicted expansion is backed up by the number of firms expecting to take on staff (up 7% to 39%) and those investing in new premises and machinery (up 3% to 44%).

In line with the economic dip seen in the last quarter, slightly fewer companies (43%) have reported an increase in sales turnover from the previous six months.

Tellingly, 45% of manufacturers cited the availability of specific skills as a barrier to growth, whilst time appears to be the ‘new gold’ for management teams, with 27% admitting they do not have enough capacity to ‘work on’ their businesses as they are too busy firefighting or dealing with everyday management issues.

Lorraine Holmes, Area Director for MAS in the North and West, explained: “Our Barometer is the only one dedicated to collecting the results, views and opinions of English manufacturing SMEs. It provides an overview of economic conditions and issues faced by the sector from October 2012 to January 2013. With over 700 respondents, the results speak for themselves.

“The overwhelming feeling is one of positivity, with order books, sales expectations, future investment in premises/machinery and the desire to create employment all up on the previous report.”

Business Secretary Vince Cable said the survey clearly demonstrated that skills provision remains a concern for many manufacturing SMEs. “It’s vital,” he said, therefore, that Government and industry continue to work together to address it, and other growth priority issues like access to finance and attracting young people into manufacturing.

“I look forward to discussing these issues and more with businesses later this week at my department’s Manufacturing Summit in Warwickshire.”

The specialist focus for the latest MAS Barometer was on market knowledge and skills, with respondents asked to reveal their biggest barriers to training and recruitment.

Not surprisingly, 45% said availability of specific skills was a major hurdle to their growth plans, followed by wage expectations (40%), level of skills available (38%) and knowing where to advertise to find the right candidate (22%).

Production operatives, CAD designers and CNC programmers are the employees most in demand by SME manufacturers, but it appears that 32% of all recruitment needs focus on non shop floor positions, such as sales, marketing and IT.

When asked about fulfilling future staff requirements between now and 2016, manufacturing SMEs tell us that apprentices and graduates will only fill 39% of the new jobs.

“SEMTA has done a fantastic job of helping companies develop the future pipeline of talent,” said Ms Holmes, “with a recent report highlighting a 142% increase in the number of apprentice starts since 2009-10.

“What our findings show is that there is still work to do and we need to ensure that the recent progress is just the start and we continue to develop apprentices and graduates that have the right level and types of skills required by manufacturers.

“In terms of where the remaining 61% will come from? Well we’ve had a lot of anecdotal information to say companies are turning to older and, in some cases, retired workers as an immediate solution to their skills shortages.”

MAS, which is funded by the Department for Business, Innovation and Skills (BIS), works for manufacturers to help shape strategy, create new products, reduce waste and review supply chains.