Mike Epton of the GrowthAccelerator talks to James Pozzi about the latest PMI results, which saw UK manufacturing grow for the tenth consecutive month, and the opportunities and pitfalls across the industry.
While this latest PMI data shows manufacturing output had risen for the tenth consecutive month, it also shows a slowing of previous numbers. What do you think the latest results say about manufacturing?
I think it would be dangerous to read too much into January’s PMI as a stand alone month as it is not a reliable indicator of the general health of the recovery. A lot of manufacturing businesses I’ve been working with have found business disrupted by the weather as well as employee illness. As a GrowthAccelerator coach, I work with companies with high growth potential and what I am seeing across sectors is cautious optimism and more importantly a willingness to invest in a range of development activities. The gradual rise in manufacturing over the last consecutive nine months is a strong reflection of business optimism in the country.
What are some of the notable success stories of the GrowthAccelerator over the last year?
GrowthAccelerator is now working with over 11,000 businesses with high growth potential across the country. We help businesses achieve their potential through four strands of coaching: accessing finance, leadership and development, sales and marketing and innovation. Successes include helping business leaders progress a product to market to securing the investment needed to grow and evolve. A good example of this is Oakrange Engineering that produces test equipment for commercial vehicles. Through the GrowthAccelerator coaching process and with additional support from UKTI they have seen increased sales to the military and successfully launched their products in the USA. Another, machine tools manufacturer, Armeg is using the strength and depth of their engineering expertise to re-focus their effort in UK manufactured specialist application products.
Which manufacturing sectors do you see major growth potential in?
From my experience to date, technology products will enjoy the growth as will the renewable energy sector but I’m also hearing good news from aerospace and mass transit sectors. I’m working with companies of all sizes but smaller companies tend to have niche offerings to all these sectors mentioned and they are seeing steadily improving trading conditions. A lot of sectors are facing pressure to offer a better service for less money. Manufacturers that can produce innovative technology-driven products to help services are generally in a strong position to grow significantly in the current climate.
In your experience, what have been some of the factors inhibiting business growth for companies?
Access to finance immediately springs to mind but it’s only part of the picture. From what I’ve seen, businesses have simply battened down the hatches during the recession and gone into survival mode and so haven’t invested in growth. Factors inhibiting growth management now is taking the time to develop an effective strategy for what happens next and getting the confidence to change tack. Recession and uncertainty damages confidence which itself creates inertia and stagnation so part of the GrowthAccelerator mission is to help businesses with real potential see that there is a bright future ahead and provide support to give management the confidence to move forward.
What do you see as some of the manufacturing trends of 2014?
In terms of manufacturing trends for 2014, I’m seeing businesses renew their focus on improving productivity as a first step to growth, maximising profitability and really working existing assets. This is widely viewed as a good way of providing the cash to grow the business while lending is less accessible. Among my clients I am seeing renewed focus on export. With UK produced goods being recognised as high quality products in other parts of the world, our big companies are leading the way in this and it benefits smaller companies too. As we know other countries do the ‘pile them high sell them cheap’ but I’m even beginning to see more production that had gone East re-shoring to the UK.