Contract Manufacturing
Back on track
Neil Tyler talks to a number of leading contract manufacturers to see how they are responding to the UK’s nascent economic recovery
A
ccording to the Confederation of British Industry the UK’s
manufacturing sector is continuing
to pick up with orders now at a level not seen since the start of the financial crisis some five years ago. Orders are rising, exports are also growing strongly and while stocks have fallen to their lowest levels since November last year, there is as yet only muted inflationary pressures to contend with. According to Stephen Gifford, the CBI’s
Director of Economics, “The manufacturing recovery is continuing to gather pace and firms are more upbeat about growth prospects than at any time since 1995.”
In terms of electronics manufacturing services (EMS) the UK has an established base of around 250 companies working in the sector and EMS providers appear to be
increasingly optimistic about business conditions. However, demand for their services will depend on a variety of economic and political developments very much outside of their control. Will Europe’s nascent economic recovery continue and how will the UK’s recovery pan out over the coming twelve months? Manufacturing contributed around 25% to UK GDP in the 1970s and while it accounts for only 10-12 percent today it still employs 2.5 million people and is responsible for 54 per cent of the UK’s exports. And despite a long history and perception of decline the UK still ranks among the world’s top ten manufacturing nations.
While the economic conditions may be
improving EMS companies are having to focus on improving their cash flow and managing their inventory more effectively.
“Their customers want lower costs because all of them are under pressure to maintain margins,” explains Thomas J.
shrewd but it doesn’t always come down to cost. They want a value added service, flexibility, agility and leverage from the
Dinges, CFA and senior principal analyst with IHS. But it’s not all to do with costs as Paul
Murphy, the Commercial Director at Axiom, explains. “Customers are more
supply chain. Customers want suppliers to offer them a competitive advantage. There is also a growing trend for CEMs to share risk and invest in capital.” According to John Boston, managing
Much More than Sensors!
Excess Stock Management Global Component Sourcing Obsolescence/End of Life
22 October 2013 Components in Electronics
www.cieonline.co.uk
www.rhopointsourcing.com 0845 030 4020
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