Manufacturing Advisory Service’s Barometer shows mixed results

Posted on 14 Aug 2012

53% of respondents to the latest Manufacturing Advisory Service (MAS) National Barometer survey have experienced order growth in the last six months.

The same number of respondents (53%) expect this trend to continue up until Christmas, according to the quarterly MAS National Barometer survey.

Roughly a third of respondents are looking to employ new people, while 71% are seeking out ways to increase their export ratio over the next several months.

The Barometer also revealed some slightly less positive news: a 9% fall in the number of companies experiencing an increase in enquiries, from 49% in Q2.

Companies have also been more reluctant to invest in new machinery and equipment; the number of companies considering investment in this area over the next six months is down from 44% in Q2 to 38%.

Highlighting the anxiety in UK manufacturing firms about investment and gaining new customers, David Caddle, MAS area director said: “The results are still showing positive signs of growth and expansion, although there are indications among SME manufacturers in England of a more cautious outlook going forward.”

“This is not unexpected when you consider the recent economic forecasts and, historically, it takes a little longer for the slowdown to cascade its way down the supply chain and to the smaller companies,” he added.

MAS focused on exports in its second National Barometer report – despite troubles within the Eurozone, 71% of firms surveyed want to increase their international orders, with over 10% expecting to boost turnover by 50% between now and 2013.

Just over four in ten said that a major hurdle to success in overseas markets is being able to generate sales and then selecting a distributor (17%) and fluctuations in exchange rates (13%).

In terms of manufacturing issues, 50% said that securing competitive production costs was listed as the biggest worry, with after sales support (19%) and meeting different international standards (14%) the other most common concerns.

MAS surveyed Birmingham-based Brandauer, one of the largest precision presswork companies in Europe. Sales at the company have been static, according to sales and marketing director Rowan Crozier, but he expects to break £10m by the end of 2013.

“We are definitely seeing softening in certain sectors, as the Original Equipment Manufacturers de-stock and put investment plans on hold,” said Mr Crozier, adding: “With automation and tooling for new projects in the environmental and automotive electronic sectors currently going through the sample approval stage, we are budgeting for significant growth over the remainder of this financial year.”

He continued: “Nearly 80% of our turnover is export and the majority is for China and the US, so we haven’t really been affected by the Eurozone crisis. I feel that English manufacturers will have to broaden their horizons; there’s a whole new world of potential clients out there in countries outside our traditional markets.”

Mr Caddle pointed out that exports have been crucial in the positive results found in the Barometer’s results. He commented: “Securing competitive production costs against global rivals has been a long-term issue and one MAS continues to help SMEs with through on-the-ground assistance and specialist workshops.”

He went on to say: “We’d also encourage manufacturers to fully utilise the network of support in place to help them succeed overseas, including tapping into support from ourselves, UK Trade & Investment, Society for Motor Manufacturers and Traders (SMMT), ADS (Aerospace Defence Security) and the world class Universities we have in England.”

The Barometer asks questions of key decision makers at over 700 companies, representing more than 28,000 employees.