anufacturers’ expectations at the start of 2014 have eased back, leaving firms cautiously confident as they head into 2015, according to the annual EEF/ Aldermore Executive Survey. Optimism has been tempered by a hefty dose of realism with those expecting UK economic conditions to improve droppinging from 70% to 37% this year. The number expecting conditions in the UK to deteriorate has tripled. However, global economic


conditions are of greater concern; 38% expect them to take a turn for


SOBER START TO 2015 AS SPARKLING CONFIDENCE STARTS GOING FLAT M


the worse in 2015 (compared to just 5% at the beginning of 2014). Despite the more pessimistic economic outlook there is good news: 70% say that the UK will be a competitive location for them in 2015. They are confident that their staff numbers, sales, margins and productivity will be heading in the right direction with those expecting an increase in these core measures consistently outstripping those expecting a decline. Almost seven in 10 expect to


improve productivity while 58% expect to boost UK sales; 49%


expect to be taking on more permanent staff. Export sales look positive – albeit expectations are down on last year. Just under half of manufacturers expect to see an increase in 2015 while 30% expect sales to remain steady. Hot spots for export growth are expected to be North and South America and Asia while in line with ongoing economic and geo-political uncertainty manufacturers see Europe and the Middle East as ‘not spots’; 59% say that an escalation would be detrimental to their company’s prospects in 2015.


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MORE FIRMS ACQUIRE EQUIPMENT USING ASSET FINANCE


Manufacturing firms worldwide are increasingly using asset finance to acquire equipment and upgrade technology, according to the latest study from Siemens’ Financial Services Division (SFS). Research conducted among the


global top 40 industrial machinery and equipment manufacturers shows that 76% of respondents have seen increased customer demand for asset finance over the past two years. In Europe its use remained static


among manufacturing firms while the proportion of equipment sales has risen over 2% per year in the US and over 15% per year in Asia. Asset finance is in a relatively


early stage of development in Asia compared with the mature economies of the West. Looking at the next two years 93% of respondents expect global interest in asset finance to increase still further from their manufacturing customer base. It is expected to


grow by over 5% annually in Europe; 3% in the US and over 14% in Asia. Strong demand for manufacturing equipment finance is expected to come particularly from China, Poland, industrial Eastern Europe and South East Asia. Its growing popularity is likely to be fuelled by budget pressures; 72% of respondents report a ‘squeeze’ on their customers’ capital equipment budget in the past two years. www.siemens.com


Southern Manufacturing 2015 10-12 February 2015 FIVE, Farnborough, Hampshire www.industrysouth.co.uk


Maintec 2015 NEC


24-26 March 2015 www.maintecuk.com


Safety & Health Expo 16-18 June 2015 ExCel. London www.safety-health-expo.co.uk


“Manufacturers’ confidence at the


beginning of last year was very high; one year on and while still positive, it has very evidently eased back,” says EEF chief executive Terry Scuoler. “The realities of 2014 have taken the edge off future forecasts and what we are now seeing as we head into 2015 is a far more muted outlook tempered by a backdrop of difficulties in the EU and wider geo- political concerns.” EEF will publish its full election


manifesto at its annual conference in February. www.manufacturingconference.co.uk


EVENTS


REPORT REVEALS INDUSTRY WASTES £1.43 BILLION A YEAR ON OUTDATED ENERGY SOURCES


A


new year but the challenges for manufacturers


will be much the same as the past decade or so. But it’s not all doom and gloom if EEF’s survey is any indication: realism but not defeat. There is still much to shout about and opportunities for businesses to reduce costs in terms of energy usage and equipment acquisition. In this issue we preview


Southern Manufacturing 2015, taking place in February. Showcasing products, technologies and solutions, the seminar programme promises practical guidance for all those involved in industry.


Susan Deane Editor


A report reveals that the British industrial sector wastes £1.43 billion each year by using outdated off- mains energy sources. The sector currently spends almost £5.3 billion a year on oil for its heating, lighting and manufacturing processes. Even though oil prices are


currently falling research suggests this figure can be cut to around £3.85 billion by switching to LPG. The wasted spend comes from those companies who, unable to access mains energy are using old- fashioned energy supplies like oil. Oil is expensive and an inefficient and dirty fuel to burn. The alternative for off-mains


energy is LPG, a fuel with a lower cost price, less CO2 emissions and greater efficiency. By switching to LPG the sector could reduce its energy costs on fuel alone by over £1.14 billion, a saving of 22%. This rises to almost £1.43 billion


when the oil burning equipment is replaced by the more fuel efficient


/ FACTORYEQUIPMENT


LPG burners, giving a total saving of up to 27% when compared to oil, says Flogas. The average business can recoup its initial outlay in under a year. In addition there are environmental benefits as the switch to LPG can lead to a significant reduction in the sector’s carbon footprint. With the sector currently using almost 95 billion KW of energy a year from off-mains resources, generated from almost 8.6 billion litres of oil - it is producing the equivalent of 25.4 million tonnes of CO2 a year. However, if that energy had been generated from LPG, the equivalent CO2 produced would be just over 19.6 million tonnes, a reduction of almost 6 million tonnes of CO2 a year (23%). The figures are revealed in the Flogas Energy Expenditure Report, the result of research initially carried out by Flogas in October 2014 to provide background information for its sales teams. However, the company was so shocked by the


findings it decided the only responsible action was to share them with the sector as a whole. It appears that many businesses


aren’t aware of LPG or are under the impression that the switching process is complicated or expensive. As market leaders at converting off-mains businesses from oil to LPG, Flogas is well aware of customer perceptions. “Times are still tough and there is a greater need than ever for businesses to reduce their energy costs and cut carbon emissions,” comments managing director Lee Gannon. “We find the biggest reasons that businesses burn oil is a lack of awareness that there is a cheaper, greener alternative or because they are under the misconception that switching is expensive or difficult. By sharing these figures we hope to help the sector make savings while making a large dent in their carbon footprint.” www.flogas.co.uk


FACTORY EQUIPMENT | DECEMBER 2014/JANUARY 2015 5


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