Monday, November 12, 2012

News: SMEs predicting future growth


Manufacturing SMEs in Yorkshire and Humber are predicting an increase in sales over the next six months according to the Manufacturing Advisory Service (MAS) Barometer.

53% of the companies questioned expect to grow between now and March 2013, with 39% of firms set to boost investment in plant and machinery. There was also a moderate increase in those planning to spend on new technology (36%).

This renewed optimism comes after a slight softening in the marketplace that has seen the number of businesses reporting increased sales drop to just 49%, down from the previous survey.

As part of the Special Focus, the Barometer also aimed to find out what sectors Yorkshire and Humber SMEs are selling into, with the findings showing materials/general engineering as the most popular (50%), closely followed by automotive (46%) and food and drink (42%).

When asked about future sales growth to 2016, marine, nuclear and off shore wind appears to be the most attractive propositions for SMEs looking to increase minority sales to a moderate or significant level.

Martin Coats, area director for the Manufacturing Advisory Service (MAS), said: "It's reassuring to see more of our SMEs are expecting to increase their sales going forward and this despite a slight fall over the last six months.

"Manufacturers have been reporting fluctuating demand and softening in certain sectors so to see the renewed optimism suggests many believe these markets are coming back on stream."

"83% of Yorkshire and Humber companies told us that they intend to maintain or increase their workforce, which shows a general stability in these figures."

Michael Fallon MP, business minister, added: "It's encouraging to hear of the optimism amongst manufacturing SMEs in this Barometer. Of course, these are still challenging times, but the recent GDP output is the latest sign yet that the wider economy is starting to recover.

"We will continue to support manufacturers through MAS to ensure they are best placed to take advantage of opportunities to grow."

This is the third National Barometer conducted by MAS and provides a snapshot of trends in English manufacturing SMEs from July to September 2012 as well as an overview of economic conditions and issues faced by the sector.

A key focus this time was the barriers to growth for companies entering specific industries.

Companies said that market knowledge was the biggest challenge to entering three of the twelve sectors listed (aerospace, marine and off shore wind), with production costs the major concern for firms looking to get involved in automotive, electronics and materials/general engineering.

Regulation, unsurprisingly, is the pressing issue for chemical, defence and pharmaceutical while material expenditure, accreditations and capacity were the barriers to entry in securing sales in food and drink, nuclear and rail respectively.

"30% of the companies we questioned classed themselves as advanced manufacturers and there is a definite trend suggesting that SMEs are generally adding more value by converting material," explained Martin.

"I don't think anyone will be surprised that market knowledge was the biggest barrier for firms across three sectors as this can be difficult information to access and interpret.

"MAS can help with this as we have a number of sector specialists who will be able to provide valuable insights and the right contacts to help SMEs get started in new markets."

MAS, which is funded by the Department for Business, Innovation and Skills (BIS), works for manufacturers and through experienced advisors can help shape strategy, create new products, reduce waste and review supply chains.

MAS website


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