MAS survey predicts SME manufacturing growth

Becky Roberts
Thursday, February 28, 2013

Almost two thirds of UK manufacturers are optimistic for growth in the first half of 2013, according to the latest Barometer survey from the MAS (Manufacturing Advisory Service).

Of the 700 SMEs that took part in the third quarter survey, 62% expect sales turnover to increase in the first half of 2013, despite only 43% reporting to have seen an increase in the the six months to 31 December 2012.

Area director for MAS in the North and West, Lorraine Holmes, said there is generally a feeling that business is now starting to move forward and attributes this to 43% of companies seeing their forward order books becoming fuller.

"Our previous surveys have shown that there has been that underlying air of optimism, but in this quarter it’s starting to firm up. It’s more about companies being able to say ‘yes our forward order books are fuller’ rather than just having a feeling that things will get better," she said.

Holmes believes this confidence can also account for the 44% who are investing in new premises and machinery, as well as the fact that access to finance has reportedly become easier.

"Companies are preparing to extend themselves again as banks become more prepared to lend now. A year or so ago banks weren’t so willing and manufacturers were having to live off their own resources. It’s by no means where we want it to be, but it is improving," she said.

The data also showed that, regardless of expectancy in business growth, 45% reported that skills provision remains a barrier to this and 38% believe there is a skills shortage.

This is despite a 142% increase in the number of apprenticeships since 2009-10, which Holmes associates with the ongoing efforts of the Sector Skills Council for Science, Engineering and Manufacturing Training and the upsurge of University Technology Colleges in the country.

SMEs reported that only 39% of their workforce will make up apprenticeships and graduates between now and 2016, as they seek older, and even retired, workers as an immediate solution to their skills shortage. MAS said it will look to tackle this by encouraging companies to calculate workforce and plan recruitments in advance.

"We will try to make them see that workforce planning is a strategic issue. They have to look at it on the same time frame as these colleges. A lot of them are dealing with the here and now," said Holmes.

A Manufacturing Summit in Warwickshire later this week will discuss this issue.

"The secretary of state will attend and there will be a series of workshops to demonstrate what can be done. It’s a brilliant opportunity to get the views of our business across," said Holmes.

 


MAS’ Barometer focused on market knowledge and skills in the industry, and provides an overview of economic conditions and issues faced in the sector from October to December 2012. Its participants are MAS clients working in a number of sectors. Eighty advisors work with manufacturing companies throughout the year to establish the issues these companies are facing, which then form the focus for MAS’ quarterly surveys. MAS is funded by the Department for Business, Innovation and Skills (BIS).

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