Manufacturing Levels At 20 Year High
7 July 2017
Manufacturers across the country will no doubt be staring at their order ledgers with a mixture of disbelief and relief. They are currently packed full of orders – the likes of which the industry hasn’t seen for almost three decades. The slump in value of British Pound Sterling has gifted our factories and warehouses with something of a renaissance.
The Confederation of British Industry released a report stating that “made in Britain” firms are luxuriating in the current wave of orders – but does warn that there may be higher costs to navigate in the future. This ‘resurgence’ has been absolutely exceptional as the number of export orders placed within British companies has not been as high as this since 1995.
The report, which surveyed 464 factories across the country, delivered the news that our domestic order books continue to swell. In fact, orders were at their level best since 1988, thanks to the burgeoning growth of markets such as food and drink, tobacco and chemicals manufacturing. Demand has been particularly buoyant in European markets.
The amazing growth that these sectors have reported will actually be able to offset the slowdown in other UK markets in the first half of the year. However, economic growth is still expected to gradually slow down, as an anticipated phase of higher inflation will really put the squeeze on household incomes across the country. Wage growth has not emulated the price increases that many companies have had to slap on their products.
Essentially, manufacturers should ‘make hay’ whilst ‘saving for a rainy day’, if such mixed metaphors apply. While the collapse in the value of British Pound Stirling since the referendum has made domestically produced goods more attractive to foreign buyers, it has also raised the cost of importing any materials needed to produce the goods in the first place.
Brexit, it would seem, has been something of a double-edged sword for the manufacturing industry. Whilst this ‘boom time’ will be well received in terms of profits and productivity, the CBI urges businesses to heed a bit of caution. They warn of sharp increases to average selling prices, and a hard Brexit may well see Britain’s credit rating be downgraded.
The CBI have painted a comfortable picture for Q2 of this year, with production only set to increase in the meantime. Growth has remained strong and the UK economy as a whole is predicted to grow at 1.6% this year and 1.4% in 2018, which is higher than initial predictions in the wake of Brexit.
If the manufacturing industry is to continue to flourish, ensuring success in attracting and retaining the right skills that are needed to keep up with the increasing demands, is nothing short of essential.
If the current surge in economic activity in the manufacturing industry has altered your staffing requirements, I would love to help you source great talent to join your business. Click here to see my details and we can discuss your recruitment needs.
Written By Stephanie Devine