2004 set for recovery on the back of IT initiatives

2004 will see cautious recovery for UK manufacturing companies, although not for employment, according to all sources. While all data show employment, numbers of factories and the machine tool population still falling, output and efficiencies are rising on the back of modern machines and integrated systems – and economic indicators and business confidence are pretty robust. In the first two weeks of December four national institutions – the Office for National Statistics, the CBI, the EEF and the Chartered Institute of Purchasing and Supply – all reported manufacturing industry and especially the engineering sectors, improving. ONS figures for the first three quarters of 2003 showed a modest recovery in manufacturing output, with likely growth of almost 2% for the year marking a turnaround of the declines notched up in 2001 and 2002. The EEF reported manufacturing output flat in 2003, but it estimated growth in engineering of 0.8%. Currently, the EEF predicts a growth of 1.9% for manufacturing as a whole and 2.4% for the engineering industries in 2004. Findlay Publications, which publishes this journal and has been running the only detailed census of UK manufacturing for more than 20 years, via its database, sheds useful extra light on the headlines. Its detailed data – covering 35,000 UK manufacturing-related sites with over 200,000 named personnel, is more comprehensive and up to date that ONS – confirms recent rapid changes in the demographic patterns of UK design and production engineering in particular. Looking at the period 1997 to 2003, Findlay’s key points include: manufacturing employment down 20%, primarily since 2000; and the number of factories employing 50-plus down 18%, again with most decline in the last three years. Meanwhile, employment of engineering designers has reduced 9%, almost entirely in the past two years; and the population of production engineers has declined by 21% in the same period – although there is movement to smaller consultancies. The total number of machine tools in use has also declined, in this case consistently by an average of 4% per year. But Findlay points out that productivity of modern equipment has improved to more than compensate. Indeed it finds considerable growth in the population of sophisticated CNC machines, particularly in SMEs, and predicts further strong growth. This is the key point. Automation and systems have, over the period covered, hugely impacted individual and departmental efficiency and productivity, as this journal monthly bears witness. Systems throughout every walk of engineering, manufacturing and supply chain management, execution and analysis – and the IT infrastructure upon which they depend – have been transformed and have themselves been transformational influences on business. Market researcher Benchmark has been noting an annual spend of more than £3bn in UK manufacturing on IT in the last five years, as industry seeks to profit from its power. And while there are no statistics upon which to found a claim that this more than counters the quite serious apparent declines, there is plenty of anecdotal and reference evidence in virtually every area of professional and business manufacturing and engineering. Keys to prosperity in 2004 are to be found in continued exploitation of our existing systems, particularly through integration – and in the markets we serve, particularly in Europe.