The previous quarterly study revealed a sector experiencing its toughest quarter in a decade, with more SME manufacturers reporting a reduction in sales, profits and staff numbers than in any period across the last ten years.
But the latest Manufacturing Barometer, published by SWMAS and partner Economic Growth Solutions, highlights a marked uplift in confidence among manufacturing businesses following the UK’s exit from the EU at the end of January.
Almost half - 46 per cent – say they are more confident about their prospects than this time last year, with 22 per cent feeling broadly the same and 32 per cent feeling less confident.
Simon Howes, MD of SWMAS (pictured), said there was a feeling that “the foot is coming off the brake” as a clearer picture begins to emerge around Brexit.
“The forecasts for the first six months of 2020 are starting to look much more positive,” says Simon Howes.
“We are not yet at the end of the road regarding Brexit, but it seems that we have at least decided which road we are going to take, so our manufacturers can begin the journey.
“Political certainty appears to have improved clarity, resulting in a (partial) return to confidence in future sales and profits. This, in turn, should lead to more confidence in investing and recruiting.
“This quarter’s special focus looked at the underlying confidence of SME manufacturers to gauge how they are feeling as they plan for 2020 and beyond. The results show that there is still a good deal of uncertainty, with some still feeling downbeat regarding their prospects for the future.
“However, it is encouraging to note that many senior people in manufacturing are now feeling more confident.”
The latest Manufacturing Barometer, which surveyed business across the UK last month, also found that:
- Some 41 per cent of firms say sales have increased in the past six months – the same as the previous quarter but down 10 per cent on a year ago
- 60 per cent of SME manufacturers expect sales to increase over the next half-year – a 16 per cent jump on the previous quarter
- More than half - 54 per cent - forecast profits to increase in the next six months – up almost 20 per cent
- The percentage of businesses expecting investment in plant and machinery to increase in the next six months is up 14 per cent from 37 to 51 per cent – the highest level for 18 months
- Recruitment expectations are broadly flat compared to a year ago – but up 10 per cent to 39 per cent in the last quarter in terms of the number of firms expecting to increase headcount
“The general clamping down on investment and recruitment decisions is finally easing,” says Simon Howes.
“Customers are now coming forward with plans which were previously on hold, but we know too that some sectors are finding it tougher than others.
“We will be working with our manufacturing clients to take a closer look at these differences and to understand the lessons that can be learned going forward in terms of people, products and processes.”
Dean Barnes, Regional Director of Economic Growth Solutions, said: “From the predominantly pessimistic message of the previous quarter’s Barometer, it is heartening to see that sentiment has bounced back this time.
“Much of the confidence being expressed by manufacturers is due to the Brexit road map having finally become clearer, but of course there are numerous potential diversions and potholes which could emerge along the way.”
