Yorkshire Barometer

Member Article

Yorkshire and Humber manufacturers report sustained investment in staff, new machinery and technology

Small manufacturers in Yorkshire & Humber are continuing to invest in their businesses as they look to capitalise on new opportunities it was announced today.

62% of firms questioned by the Manufacturing Advisory Service’s Barometer are planning to spend more on machinery/plant, with 48% channeling increased funding into the development of new technologies. This marks a 16% and 7% rise respectively on the same period last year.

There was a similar optimism when asked about confidence to recruit. Exactly half of companies said they were looking to create new jobs in the next six months, up from 38% in March 2013.

These figures are reinforced by growth in sales. 62% of SME manufacturers have enjoyed higher sales and even more (70%) are expecting to win new work between now and October.

Encouragingly, companies appear well placed to take advantage of new opportunities, including expansion and reshoring of supply chains in automotive, aerospace, and nuclear sectors.

Business Minister Michael Fallon said:

“Britain’s manufacturers are helping drive the UK economic recovery. Through our industrial strategy and economic plan, the Government will continue to work closely with this vital sector to ensure that confidence stays high, creating more highly-skilled jobs and a stronger economy for everyone.”

David Caddle, Area Director for MAS in Yorkshire and Humber, commented: “We have seen consistent signs during the last twelve months that firms are ramping up capacity, in order to meet increasing orders and take advantage of work coming back to the UK.

“This is the clearest signal yet that our manufacturers believe the upturn is sustainable. Strong annual improvements for investment in machinery and technology suggest many small manufacturers are planning for the long-term and, encouragingly, they are taking action now to manage future expansion.

“Our Barometer report highlights that small and medium sized manufacturers are contributing strongly to jobs growth and expect to continue to recruit. They may find it harder to follow this trend, especially in advanced manufacturing sectors, unless they invest in training and retention.”

These predictions for expansion in the MAS Barometer are taking place against a backdrop of rising energy prices across industry.

Over three quarters of small and medium-sized manufacturers reported an increase in their energy costs over the last year, only part of which is explained by increased production. Some 66% of those SMEs were hit with rises of 6% or more.

Most companies looking to reduce their energy costs have taken measures to cut their bills. These include enhanced heating or lighting systems (48%), upgrading machinery (42%), streamlining processes (34%) and changing energy supplier (32%).

Whilst more than half (60%) of manufacturing SMEs measure heating and lighting, other significant energy uses are poorly monitored.

Tellingly, in excess of a third (36%) of firms monitor usage for plant and machinery, whilst just over a quarter (27%) admit to keeping track of energy used in processing raw materials.

David concluded: “Managing energy costs is a major concern for Yorkshire and Humber manufacturers, but sometimes this gets overlooked when they are focused on growth and the day-to-day challenge of meeting ever-changing customer requirements

“MAS Advisors can help with this by preparing the right strategies for growth, covering the customers, products, equipment, people, resources and finances necessary for sustainable growth.”

Case Study

Leeds-based Foam for Comfort was one the companies questioned in the latest MAS Barometer and reflects the growing trend of positivity, investment and job creation.

The firm, which supplies reflex foam, traditional latex interiors, fitted covers and mattresses to retail and trade, is reaping the benefits of sustained investment in its website with an increase in sales taking it past the £750,000 barrier.

“We were fortunate that we survived the recession in pretty good shape so what we’ve tried to do is build on this platform by securing steady, organic growth,” explained Andrew Sykes, Managing Director.

“Our current client base spans retail and industrial customers and we are just as adept providing foams for church pews and soft play units, as we are developing bespoke mattresses for the NHS and specialist packaging for carrying valuable goods.”

He continued: “As part of our business planning, we recognized the potential to transform our website into a far better showcase of the products we offer and the services we provide.”

“We tapped into MAS support to launch a new online presence (www.foamforcomfort.co.uk) and traffic has already doubled as a result.”

Foam for Comfort, which has increased its workforce to ten employees this year, is currently in the process of implementing new enterprise resource planning software to monitor business performance and secure greater efficiencies.

This was posted in Bdaily's Members' News section by Russ Cockburn .

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