Time is right for manufacturers to invest

There certainly appears to be a warmer glow surrounding the English economy at present and a continuing upturn in manufacturing appears to be playing its part.
Time is right for manufacturers to invest

Lorraine Holmes, Area Director

Encouraging PMI statistics, a surge in output and continuing good news from the SMMT’s car figures have created a sense of renewed optimism, albeit laced with calls for companies to loosen the purse strings and invest in even greater growth.

The good news is that manufacturing SMEs have been listening. Our latest Manufacturing Barometer questioned 89 senior directors in the West Midlands and 57% expected to invest more in new machinery and premises over the next six months.

This overwhelming response should not be underestimated. Engineers are a cautious bunch by their very nature and they will only spend if they can see long-term optimism in the marketplace.

There also appears to be a similar appetite for embracing new technologies, with 39% of firms indicating they will fund more activity in this area.

Reading through the newspapers and trade magazines I doubt this will come as too much of a surprise. You can’t seem to turn the page without stories of investment in new capital and this is exactly what we need if we are to take advantage of the opportunities both at home and abroad.


The second MAS Barometer of 2013 collected responses from 89 manufacturing SMEs across the region, providing an overview of economic conditions and issues faced by the sector from April to June this year.

It revealed a general story of positivity, with 48% of firms reporting an increase in sales in the first half of the year. Better still, 67% expect to grow over the next six months.

There was also welcome news on the jobs front as 53% of respondents said they would increase staff, which is 7% up on the previous report.

Our regular quarterly special focus concentrated on finding out whether business growth could be linked to innovation.

86% of SME manufactures reported that new products introduced over the last two years had led to new sales, with 37% reporting an increase in both sales and profits.  Over a third (38%) told us that new sales accounted for 25% or more of their total turnover.

The Barometer also revealed that the majority of respondents are meeting the diverse requirements of the automotive, defence and oil and gas sectors. Marine, aerospace and electronics are also generating strong demand.

Everything appears to be moving in the right direction and, now the brakes have been taken off the investment plans, we should see even better results in our next report in November.

‘Happy shopping’ manufacturing SMEs!

Lorraine Holmes, Area Director for the Manufacturing Advisory Service (MAS) in the North and West

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