The latest National Manufacturing Barometer, a quarterly survey conducted by SWMAS (part of Exelin Group) in partnership with Economic Growth Solutions (EGS), invited 320 manufacturing industry leaders to discuss performance, with a special focus on productivity and the extent to which it is engrained in manufacturing business culture.
An overwhelming majority of respondents (72%) said they anticipate an increase in sales in the next six months – the highest figure recorded for nearly three years.
In a further indication of confidence in the sector, 59% of respondents said they were expecting increased profits over the next six months.
However, as only 45% of manufacturers actually experienced an increase profits in the second half of 2017, the gap between anticipated sales growth and actual recent improvements in profits continues to raise questions about productivity.
Encouragingly, more than half (56%) of manufacturers indicated in the Barometer that they aimed to deliver against their growth targets by investing in machinery and premises; a rise of 13% on the last report.
Furthermore, 48% of respondents to the latest survey said they planned to recruit new staff, which is only 2% higher than the same time last year. This suggests that improving productivity through the existing workforce and facilities remains the key focus.
The latest Manufacturing Barometer survey also explored the extent to which manufacturers have integrated productivity into their business and workplace culture. Around 70% are confident that productivity is engrained at a strategic level, and championed by business leaders. However, almost half indicated they would like to achieve better, and sustainable, productivity improvements, pointing to the need to improve engagement with staff to deliver and sustain change.
Exelin Group chief Simon Howes says: “Confidence levels are riding high in the manufacturing sector despite market uncertainties, demonstrating the strength and resilience of our SME manufacturers.
“The Barometer does, however, illustrate there is a definite gap between many manufacturers’ expectations about future performance and their ability to deliver the productivity gains required to drive sales and profit growth.
“Our special focus on productivity and culture suggests that while many firms have successfully embedded productivity good practice at a strategic, leadership and management level, there remains a stumbling block in actually delivering lasting productivity improvements. In short, manufacturers have to look harder at how they engage their workforce to unlock their own hidden potential – and so achieve their sales and profit ambitions in the process.”
The survey covers the business operating period for winter 2017 (October, November and December 2017) with businesses surveyed in January 2018.
