UK - The National Manufacturing Barometer report has noted that SMEs in the UK currently rate their workforce and existing equipment above of new investments.
The 2017 third quarterly survey conducted by SWMAS (part of Exelin Group) in partnership with Economic Growth Solutions (EGS) covered 280 small to medium sized manufacturers enquiring how they plan to increase business productivity.
The Manufacturing Barometer report noted only 43% who plan to invest in new equipment and a mere 40% of the companies intend to recruit to meet future increases in sales. Indeed, such a low recruitment figure has not been noted for several years now, the last low statistic that the Manufacturing Barometer reported dates back to 2013.
Confidence in the business workforce can be a positive sign. Moreover, the survey does indicate that prospects for sales growth in manufacturing will linger. Over the last six months, 61% of the SMEs recorded an increase in sales, while 59% of the companies surveyed are convinced that this trend would very likely go on, the report noted. All these do point to the need to improve productivity in order to grow.
Another indicator that the manufacturing sector is stable and robust is noted by the findings that 47% of the respondents expect profits to rise in the next six months and 41% have recorded profits over the last six months.
According to the Office for National Statistics, productivity in the UK continues to lag behind its major trading partners such as the US, France and Germany. But manufacturing in the UK is nevertheless buoyant in the last few years, despite warnings from economists. The impact of Brexit does however accentuate industrial efficiency and the UK government’s strategy is increasingly looking to robotics and automation to raise productivity. Most of the companies surveyed, however, said that they would adopt smarter working practices and promote better utilisation of existing equipment to increase and improve productivity over new equipment or automation, the report also noted.
Simon Howes, CEO of Exelin Group, commented on the findings: “Manufacturers clearly understand the need to improve productivity. However, with much in the news about automation and robotics, it may come as a surprise to policy makers that for many businesses, the first priority is to optimise existing resources.”
“Increasing productivity isn’t about doing just one thing or another, it’s more about taking a whole review of the business and identifying areas where you can improve efficiencies, reduce waste and seek competitive advantage,” Dean Barnes, Regional Director of Economic Growth Solutions and the Manufacturing Growth Programme (MGP), added.