Partner Article

UK manufacturers gain in confidence but challenges remain

A survey of UK manufacturers by the Yorkshire office of global legal practice Squire Sanders has revealed that despite a difficult few years there may be positive signs on the horizon for the sector.

The survey features almost 200 manufacturing companies – ranging in size from small businesses to global giants with a turnover in excess of £100 million – and showcases a quietly confident sector with a future focus on investment.

There are still concerns, however, particularly in relation to the low value of exports with overseas sales accounting for less than 10% of turnover for almost half of all UK manufacturers surveyed.

Importing and exporting continues to be a challenge due to the lack of government support in showcasing UK manufacturing offerings, with 33% of manufacturers not currently looking to grow exports.

However, some companies are successfully exploiting overseas markets through good planning and understanding the cultural aspects of doing of business outside the UK: 33.9% of manufacturers are focussing on the European Union, 20.5% on North America, 20.5% on South America and 18.8% on the Middle East. Looking to the future, 38.6% of manufacturers plan to grow by exporting.

The biggest challenge facing manufacturers is still a lack of confidence in the sector which is affecting the number of companies looking to grow. Of those surveyed, 51.1% of businesses predicted that they would see low to moderate growth (under 10%) in 2013. Looking towards 2015, 46.5% of respondents see themselves growing organically whilst 53.5% hope to grow through new products and services.

In response to the survey, Karen French, real estate partner at Squire Sanders, commented: “Manufacturers are considered crucial for rebalancing the national economy and absorbing job losses in the public sector.

“For now, the issue surrounding skillsets and recruitment is likely to remain considerable and, without proper funding, is something that could be difficult to address.

“Generally we feel a number of manufacturing businesses could be more aggressive with their growth plans.”

This was posted in Bdaily's Members' News section by Mark Lane .