FOCUS ON: MANUFACTURING
CTURING
Manufacturing may not always automatically have the glitz and glamour of some sectors, but it provides the foundations for our economy and is an excellent barometer of how we are doing and what lies ahead.
Making a brighter
future H
Jim Brown, partner at Bristol-based chartered accountants BDO LLP, said: “On the back of healthy output and order books, the
18 Business West Update SEPTEMBER/OCTOBER 2011
aving got used to a regular flow of gloom and despondency it comes as something of a welcome shock to learn that at least one sector of our economy is producing good news and signs of improvement. Those signals may be relatively weak at the moment but they seem to be consistent and provide real cause for optimism. Wages in manufacturing companies are rising, export prices are on the up, output is increasing and more companies are taking on additional staff. Admittedly the numbers are not massive but they are important since the sector is responsible for 55% of all UK exports and keeps us at number six in the world’s manufacturing league table.
Perhaps most surprising of all but manufacturers say access to lending is also slowly beginning to pick up. According to the manufacturers’ organisation, EEF, a survey showed that the number of small businesses reporting an increase in the availability of new sources of finance was the same as the number reporting a decrease. At first sight that might not sound very promising, but it contrasts with earlier this year when a similar survey revealed a balance of -11% on the same point.
intention to recruit amongst manufacturers has remained strong, with official data showing record levels of vacancies. However, the key issue is whether companies are able to meet their intentions and fill their vacancies with the highly skilled workers they require. “What we are witnessing among our client base is the willingness to recruit, but it’s often very difficult for employers to find people with the adequate skills set to fit the role. We are faced with a short term problem that can only be overcome by long-term solutions. To ensure the UK retains its competitive edge, the Government must do more to emphasise education in engineering and manufacturing to guarantee its future workforce has the appropriate skills to deliver the sector’s needs.” EEF also says that wages in the South West continue to show a gradual increase, with average settlements for the first part of this year up 2.6% with the proportion of settlements agreed at more than 3% continuing to drift upwards. But it’s not a universal picture since one in seven businesses continued to freeze wages. Terry Slater, regional rirector for EEF in the South West, said: “The average pay settlement is now three times what it was in March 2009 and is slowly but steadily climbing towards the three per cent mark, suggesting growing strength in the sector. Almost a third of manufacturing companies recruited new employees in the first quarter and that figure is expected to increase.”
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