SME manufacturers are at their most confident for two years with over half expecting to recruit to meet an anticipated rise in sales.

SME manufacturers
Image: Deritend

These are some of the conclusions from the latest Manufacturing Barometer, carried out by SWMAS (the South West Manufacturing Advisory Service) and the Manufacturing Growth Programme (MGP).

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Nearly two thirds of firms are expecting to increase sales between now and October, with 58 per cent indicating that they are planning to increase investment over the next six months. Out of nearly 300 firms questioned, 54 per cent highlighted the need to recruit staff over the coming months.

This quarter’s Barometer took looked at how manufacturing SMEs are recovering from the pandemic and just under half (48 per cent) expect to return to, or exceed, their pre-COVID-19 position within three months. In total, 80 per cent of businesses took advantage of the furlough, which is now being used 37 per cent of respondents.

The survey found also that new working practices are being implemented, with 42 per cent of respondents planning to offer employees some level of remote working (up 28 per cent on pre-pandemic levels).

In a statement, Nick Golding, managing director of SWMAS, said: “There has been a lot of evidence recently about a stronger than expected recovery and the Manufacturing Barometer certainly reinforces this train of thought, with manufacturers showing increased confidence in future sales.

“Small to medium-sized manufacturers experienced a positive quarter’s trade between January and March, with 46 per cent reporting an increase in sales, compared to 31 per cent in the previous barometer.”

“Whilst COVID-19 has been challenging, it has accelerated new ways of working, some of which have proven to be more effective.”

He continued: “Over two fifths of manufacturers have said they will continue to offer some form of remote working going forward, which would have been unheard of fifteen months ago. These beneficial changes will offer employees more flexibility and, ultimately, a better work/life balance.

“Firms often cite that recruiting skilled staff can be a challenge. With this in mind, it is vital that they understand the working practices offered by other employers across the sector to help them compete and attract the best talent.”

Barometer respondents were less optimistic about the content of Rishi Sunak’s Budget, with less than a quarter confident that the measures introduced will aid recovery.

Martin Coats, managing director of MGP, said: “SME manufacturers are definitely feeling confident about the future, but there will still be a lot of challenges to overcome, not least the availability and lead times of material. Government will need to consider future support to help the manufacturing industry navigate the coming months.

“In terms of digital infrastructure, nearly 60 per cent of management teams believe what they already have in place is sufficient for their future plans, however, 20 per cent recognise a need for support in this area, and this may become an issue for more businesses as the sector continues to adapt.”

He concluded: “15 per cent of respondents have invested in IT Skills training to help their employees feel comfortable with this new way of working. In addition, almost a quarter of those questioned are planning to offer mental health awareness support/training to their workforce. This shows that manufacturers understand the impact COVID-19 may have had on employee welfare and are prepared to support their staff in this area.”

The latest Manufacturing Barometer covers trading activity in January, February, and March 2021, with responses collected between 12th and 23rd April. The report can be downloaded at: www.swmas.co.uk



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