finance
2016 MHA Manufacturing and Engineering Report
The leading association of independent accountancy firms, MHA has been providing an insight into the UK’s manufacturing and engineering landscape over the past five years with its annual Manufacturing and Engineering Survey. 2016 is a standout year, not least because it now includes the views of over 500 predominantly SME businesses in the sector, but also because the UK, by referendum, has opted to leave the EU, with all that entails. The results reflect this decision as it was launched after the referendum result was declared
Business confidence
We asked businesses to rate their business confidence in a number of areas. 57% were positive about turnover and 49% of respondents felt positively about their overall level of business confidence. However, almost half (42%) were concerned about currency fluctuation and 75% of manufacturing firms indicated they were concerned with the cost of raw materials.
Barriers to growth
When looking at barriers to growth over the next 12 months, understandably the most common responses were uncertainty surrounding Brexit (35%). Further global economic concerns were indicated by 19% of respondents and 18% felt that recruiting appropriately skilled staff was a cause for concern. 14% also reported working capital constraints as an issue.
Employment and skills
51% of businesses surveyed are looking for one to three apprentices (a 7% increase from last year), whilst 43% aren’t looking for any at all (a 1% decrease from last year). Almost three quarters of respondents (71%) have a problem finding skilled staff, with skilled machinists topping the list of being the most difficult to recruit, followed by experienced engineers.
Report extract: Key findings - 1
The survey shows with clarity that the skills question remains unanswered. Half of all respondents put government action on this point at the top of their agenda. Unfortunately, beyond pushing the academic end of STEM, substantial action has not been forthcoming, nor is there any sign that this is going to change in any radical way. It is hoped that the Apprenticeship Levy, which comes into effect from April 2017, may well help companies to take on more apprentices to bridge the skills gap in future, but we must not end up with a system that puts quantity of trainees over the quality of their training. Concern also surrounds the Government’s secondary education priority regarding the reintroduction of grammar schools; rather than continuing the focus on developing a more vocational alternative to help ‘home grow’ our future engineers.
Exporting
There has been a concerted push to help UK companies break into new markets across the globe. Through schemes such as ‘Passport to Export’ and subsidised trade missions, UKTI and others have been tasked by the Government to increase the UK’s global share. Our survey indicates that the most popular destination remains the eurozone, with 90% of exporting companies shipping goods there. This represents an 8% decrease on last year which is perhaps surprising given the fluctuation of sterling. North America
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businessmag.co.uk
THE BUSINESS MAGAZINE – THAMES VALLEY – NOVEMBER 2016
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