More sales, more jobs and more investment predicted by SME manufacturers

Posted on 17 May 2021 by Tom Lane

Confidence amongst SME manufacturers is at its highest level for two years according to the latest Manufacturing Barometer, carried out by SWMAS (the South West Manufacturing Advisory Service) and the Manufacturing Growth Programme (MGP).

Nearly two thirds of firms are expecting to increase sales between now and October, with 58% indicating that they are planning to boost investment over the next six months as they look to the future. Out of nearly 300 firms questioned, 54% highlighted an increased need to recruit staff over the coming months.

This quarter’s Barometer took an in-depth look at how manufacturing SMEs are recovering from the pandemic and, encouragingly, 48% of respondents now expect to return to, or exceed, their pre-COVID-19 position within three months.

On the jobs front, although 80% of businesses have utilised the government’s furlough scheme at some point in the last year, only 37% are still using it today.

The report also reveals that new working practices are being implemented because of the pandemic. 42% of the business leaders questioned are now planning to offer their employees some level of remote working, up 28% from the number who were offering this before the pandemic began.

Nick Golding - Brexit
Nick Golding, Managing Director of SWMAS (South West Manufacturing Advisory Service)

Nick Golding, Managing Director of SWMAS, commented: “There has been a lot of evidence recently about a stronger than expected recovery and the Manufacturing Barometer certainly reinforces this train of thought, with manufacturers showing increased confidence in future sales.

“Small to medium-sized manufacturers experienced a positive quarter’s trade between January and March, with 46% reporting an increase in sales, compared to 31% in the previous barometer.”

“Whilst COVID-19 has been challenging, it has accelerated new ways of working, some of which have proven to be more effective.”

He continued: “Over two fifths of manufacturers have said they will continue to offer some form of remote working going forward, which would have been unheard of fifteen months ago. These beneficial changes will offer employees more flexibility and, ultimately, a better work/life balance.

“Firms often cite that recruiting skilled staff can be a challenge. With this in mind, it is vital that they understand the working practices offered by other employers across the sector to help them compete and attract the best talent.

“The intelligence within this quarter’s Manufacturing Barometer offers businesses a unique advantage in terms of supporting their future growth ambitions.”

Whilst the Chancellor heralded his ‘business-friendly’ budget earlier this year, less than a quarter of respondents feel that the measures introduced will aid recovery.

Nearly half of companies have said that they don’t think the budget will affect their recovery, which indicates that it may not be tailored to the needs of the manufacturing sector.


Martin Coats, Managing Director of MGP, went on to add: “SME manufacturers are definitely feeling confident about the future, but there will still be a lot of challenges to overcome, not least the availability and lead times of material. Government will need to consider future support to help the manufacturing industry navigate the coming months.

“In terms of digital infrastructure, nearly 60% of management teams believe what they already have in place is sufficient for their future plans, however, 20% recognise a need for support in this area, and this may become an issue for more businesses as the sector continues to adapt.”

He concluded: “15% of respondents have invested in IT Skills training to help their employees feel comfortable with this new way of working. In addition, almost a quarter of those questioned are planning to offer mental health awareness support/training to their workforce.

“This shows that manufacturers understand the impact COVID-19 may have had on employee welfare and are prepared to support their staff in this area.”

The latest Manufacturing Barometer covers trading activity in January, February, and March 2021, with responses collected between 12th and 23rd April.

To download the full report, please visit