With Q1 of 2016 already behind us, almost three-quarters of the UK’s manufacturers say they’re expecting their business to grow during the rest of this calendar year; that’s according to the latest results to come out of our Business Census.
The survey of more than 1,000 business leaders, of which 15% worked in manufacturing, revealed that 78% of firms are forecasting growth in turnover; a contrasting story to recent media reports of the OBR’s recent downgrading of its forecast for the UK’s productivity.
Manufacturing was shown to be the joint-second strongest growing sector last year too. It reported the second highest growth, just behind construction, with 71% of businesses in this sector answering ‘yes’ when asked ‘did your business grow in terms of turnover in 2015’.
“We’re optimistic for this year; sales are up and we’re building for growth. As a niche manufacturer, we can’t rely on anyone but ourselves to generate that growth – that’s our big challenge.”
Patrick Tonks, Great Bean Bags
To verify the findings of the Census, we took a further sample of 7,436 UK manufacturers from the Company Check database and reviewed their turnover by analysing their last three years of full, submitted accounts. We found that 62% grew over the period, compared to 37% that shrunk (with 1% staying the same). Most interestingly, of those that did grow, 72% grew by more than 10%; significant growth for any business, let alone the famously tough manufacturing sector.
Of course, we all know that past performance is no guarantee of future success, however, in this case, three years growth for almost two-thirds of manufacturers in our sample goes someway to explain the optimism revealed by those businesses who took our Census and why it contradicts the perceived wisdom that manufacturers have their backs to the wall.
It suggests that reality for the UK’s makers in factories and on production lines is more positive than headlines have suggested.
However big questions do still remain over recruitment in the industry with the widely reported skills shortage named as one of the manufacturers’ biggest challenges ahead. Last year it was the biggest single issue they faced, and though 25% fewer business leaders named it their top concern for the rest of 2016, it’s still clearly a big issue which the Government must address.
Political fears have doubled compared to last year – no surprises there as increased security fears and the EU referendum take centre stage. The outcome of the vote on June 23rd hangs in the balance and it remains to be seen what the result will be; for UK manufacturing as much as any political ramifications.
To read the Business Census in full click here. I’d love to hear from you about whether the experience of your business matches the findings, and how 2016 is shaping up for you so far. Get in touch below!