SECTOR FOCUS: BUSINESS FINANCE
the future W
Investing in
PAUL HALFORD, regional director for NatWest commercial banking, looks at how manufacturers in the Midlands can get ahead.
ith a challenging few years behind us, the signs are promising for manufacturing businesses across the region. Since the recession ended, the sector has accounted for a fifth of economic growth ‒ according to the EEF.
While this is good news, I am in no doubt that the sector continues to face a number of challenges in order to operate and expand. For manufacturers, balancing the need for a quality end product and competitive offering with an efficient supply chain can prove difficult. Nevertheless, the wider economic climate remains the key challenge, according to a sector insight carried out by NatWest. Our research highlighted that almost three quarters of manufacturers still believe this is the case.
Despite the obstacles, manufacturing businesses continue to invest in the future. In August 2013, the NatWest and EEF Innovation Monitor Report highlighted that 96 per cent of manufacturers had engaged in some form of innovation in the past three years. Included in this is focusing on new product development, with almost 45 per cent of manufacturers doing so in order to break into new markets and keep ahead of the competition.
Even in times of economic uncertainty, businesses clearly feel confident enough and acknowledge the need to invest. Consequently, it is down to the banks to support customers in achieving these ambitions. Our specialist team at NatWest and RBS have been working closely with
manufacturers to enable them to grow their business and realise their goals. We have seen an increase in the number of lending applications ‒ highlighting the hunger for growth and development throughout the sector. Customers have also told us they would like to better understand how technology could improve efficiency, gain support in new product and service innovation and receive backing for funding capital expenditure.
Regarding the latter, our research shows that some 25 per cent of manufacturers want to increase borrowing in the next six months and 37 per cent are looking to increase their capital investment. While innovation and investment is not always an easy task to master, the report suggests that over half of businesses (53 per cent) are either ‘good or excellent’ at realising a return on their investment. All of this signals a positive future for the industry. Clearly, innovation will remain a key driver and investment will be needed to help maintain and drive business ambitions.
NatWest and RBS are dedicated to supporting manufacturers and aim to continue doing so to help create jobs, increase export and secure the economic recovery.
GREATER BIRMINGHAM CHAMBERS OF COMMERCE DIRECTORY 2014/15 73
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