Quarterly Survey Results (Q2) SOUTH WEST - SWMAS...2014 – March 2015) compared with the past 6...

Quarterly Survey Results (Q2) SOUTH WEST July – September 2014

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Contents

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South West: ForewordManufacturers’ AspirationsMAS Barometer Outlook Q2 MAS Measuring TrendsSpecial Focus – ProductivityManufacturers’ AspirationsEconomist’s ViewpointPostscriptHelp and Information

Productivity

2Quarterly Survey Results Q2 – July to September 2014


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Quarterly Survey Results Q2 – July to September 2014

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TSouth West: Foreword

Simon Howes Area Director for South West EnglandManufacturing Advisory Service


This quarter, nearly 150 key decision makers from manufacturing SMEs across the South West took time to respond to our Barometer survey and give us their views and opinions.* The feedback we received will continue to be used to tailor and inform the specialist support MAS and our strategic partners deliver, so we are grateful to all those who participated.

Much discussion in recent weeks has focused on growth in the manufacturing sector slowing down from the levels reached earlier in the year, with the Bank of England calling for the UK as a whole to increase its productivity.

While the results of our latest Barometer appear to reinforce the softening of the marketplace, we are encouraged that SME manufacturers in the region are already raising productivity and are cautiously optimistic about future prospects.

At a time when figures from the Office for National Statistics indicate a fall in business investment between July to September this year, it is also particularly welcome that so many companies in

the South West identify a commitment to spend on new technology, machinery or premises between now and the spring of 2015. This shows the vital role manufacturers in the region are playing in helping to support the local and national economy.

Our advisors are continually working with manufacturing businesses to help them understand market forces and plan steps to make them more competitive, especially against international rivals. We believe that this helps build and maintain confidence, and that this in turn will enable business leaders to invest and continue to be best placed to capitalise on new opportunities as they emerge.

Simon HowesArea Director for South West EnglandManufacturing Advisory ServiceNovember 2014

3Quarterly Survey Results Q2 – July to September 2014

* Small and medium sized enterprises. Defined as firms that employ less than 250 full time equivalent employees and either turnover less than €50m or have balance sheets of less than €43m.







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T Continued business growth based on better customer service and new products. Increased efficiency to meet customer pricing needs while increasing business profitability. Leafield Marine Ltd Air valves for inflatable structures

For our levels of new customer business to outstrip the decline in ‘pre-recession’ customer base. Inoplas Technology

Injection moulded assemblies and components

Increase our competitive advantage in selected markets through developments in products, processes and people. PB Design Standby power solutions

Continue to solidify the business as an excellent sub contract engineering facility with annual growth of circa 10% pa. Progress Engineering Ltd

Bespoke machining and fabrication

To keep going from strength to strength. Rockwood Composites Ltd

Composite components

Manufacturers’ Aspirations

Aerospace Rail

Food

Defence

Materials/Engineering

Electronics

Automotive

Pharmaceutical

Offshore Wind

Marine

Chemical

NuclearClick on each company’s name to visit their website

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http://www.leafieldmarine.co.uk/

http://www.inoplas.co.uk/

http://www.pbdesign.co.uk/

http://www.progressengineering.co.uk/

http://www.rwcomposites.com/

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TMAS Barometer Outlook Q2

Much Reduced

Reduced No Change

Increased Much Increased

Respondents

Has your sales turnover changed within the past 6 months?

3% 14% 32% 40% 11% 148

Do you expect your sales turnover to change over the next 6 months?

0% 9% 35% 50% 6% 147

How does your order book look compared with 6 months ago?

2% 21% 29% 39% 9% 147

Have your enquiry levels changed compared with 6 months ago?

0% 17% 38% 36% 9% 146

Do you expect staff numbers in your company to change in the next 6 months?

0% 6% 52% 38% 4% 145

Do you expect your investment in new machinery/premises to change in the next 6 months?

0% 5% 45% 38% 12% 148

Do you expect your investment in new technology to change in the next 6 months?

0% 2% 54% 39% 5% 148


5







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MAS Measuring Trends

6

0%

100%

80%

60%

40%

20%

Future: Sales

Percentage of SME manufacturers that predicted sales turnover growth in the next 6 months (October 2014 – March 2015)

Q12013/14

Q22013/14

Q32013/14

Q42013/14

Q12014/15

Q22014/15

Q12012/13

Q22012/13

Q32012/13

Q42012/13

Q42011/12

58% 51% 58% 64% 67% 68% 61% 78% 65% 72% 56%

Q12013/14

Q22013/14

Q32013/14

Q42013/14

Q12014/15

Q22014/15

Future: Employment

Percentage of SME manufacturers that predicted staff increases in the next 6 months(October 2014 – March 2015)

Q12012/13

Q22012/13

Q32012/13

Q42012/13

Q42011/12

42% 33% 33% 35% 44% 39% 40% 58% 49% 47% 42%







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MAS Measuring Trends


Future: New Technology

Percentage of SME manufacturers that predicted increased investment in new technology in the next 6 months (October 2014 – March 2015)

41% 40% 41% 47% 50% 53% 50% 57% 51% 49% 50%

Future: Machinery & Premises

Percentage of SME manufacturers that predicted increased investment in new machinery or premises in the next 6 months (October 2014 – March 2015)

35%27% 31% 42% 39% 34% 40% 42% 46% 44% 43% 44%0%

100%

80%

60%

40%

20%

Q12013/14

Q22013/14

Q32013/14

Q42013/14

Q12014/15

Q22014/15

Q12012/13

Q22012/13

Q32012/13

Q42012/13

Q42011/12

Q12013/14

Q22013/14

Q32013/14

Q42013/14

Q12014/15

Q22014/15

Q12012/13

Q22012/13

Q32012/13

Q42012/13

Q42011/12







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Productivity

Special Focus – Productivity

SME manufacturers report on their feelings towards their past and future productivity

47%

33%

14%

1%

5%

SME manufacturers indicated how they feel productivity within their businesses in the past 6 months (April – September 2014) compared with the previous 6 months (October 2013 – March 2014)

Respondents 146

SME manufacturers indicated how they feel productivity within their businesses needs to change in the next 6 months (October 2014 – March 2015) compared with the past 6 months (April – September 2014)

Respondents 146

Previous 6 months Next 6 months

1%

25%

64%10%Much Increased

Incr

ease

d

No

cha

ng

e

Reduced

Much Reduced

Much Increased

Increased

No ch

ang

e

Redu

ced







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Construction Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the construction sector, report on their feelings towards their past and future productivity

43%

57%

Productivity



Respondents 29


Respondents 29

SME manufacturers indicated whether their businesses would benefit from a greater knowledge of how tomeasure productivity

Respondents 28

✓

✗

YES

NO

Previous 6 months Next 6 monthsMuch Increased

Increased

No Change

Reduced

Much Reduced

41%

7%

45%

7%

76%

7%17%




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Electronics Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the electronics sector, report on their feelings towards their past and future productivity

54%

46%

Productivity



Respondents 26


Respondents 26


Respondents 26

✓

✗

YES

NO


Increased

No Change

Reduced

Much Reduced

54%

4%

27%

15%

65%

15%19%




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Aerospace Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the aerospace sector, report on their feelings towards their past and future productivity

61%

39%

Productivity


11%


Respondents 28


Respondents 28


Respondents 28

✓

✗

YES

NO


Increased

No Change

Reduced

Much Reduced

71%

7%21%

39%

4%

39%

18%




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Food and Drink Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the food and drink sector, report on their feelings towards their past and future productivity

42%

58%67%

38%

Productivity


13%4%21%

33%

25%


Respondents 24


Respondents 24


Respondents 24

✓

✗

YES

NO


13%72%15%1%0%

Much Increased

Increased

No Change

Reduced

Much Reduced




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Materials and Engineering Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the materials and engineering sector, report on their feelings towards their past and future productivity

56%

44%

Productivity



Respondents 42


Respondents 42


Respondents 41

✓

✗

YES

NO

Much Increased

Increased

No Change

Reduced

Much Reduced


43%

2%

36%

19%

71%

7%21%




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Defence Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the defence sector, report on their feelings towards their past and future productivity

57%

43%

Productivity



Respondents 31


Respondents 31


Respondents 30

✓

✗

YES

NO


Increased

No Change

Reduced

Much Reduced

42%

3%

45%

10%

68%

10%23%




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Automotive Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the automotive sector, report on their feelings towards their past and future productivity

62%

38%

Productivity



Respondents 26


Respondents 26


Respondents 26

✓

✗

YES

NO


4%

Much Increased

Increased

No Change

Reduced

Much Reduced

54%

4%

31%

12%

62%

4%31%




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Marine Sector: SME manufacturers, with at least 10% of their sales turnover resulting from the marine sector, report on their feelings towards their past and future productivity

58%

42%

Productivity



Respondents 24


Respondents 23


Respondents 24

✓

✗

YES

NO


Increased

No Change

Reduced

Much Reduced

54%42%

4%

65%

4%30%




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48%

58%

43%

42%

45%

45%

54%

58%

51%

SME manufacturers report on their feelings towards their past and future productivity


Productivity

29

26

28

24

42

31

24

26

SME manufacturers, with at least 10% of their sales turnover in each of the abovesectors, indicated that they feel productivity within their businesses in the past 6 months (April – September 2014) had ‘increased’ or ‘much increased’ compared with the previous 6 months (October 2013 – March 2014)


SME manufacturers, with at least 10% of their salesturnover in each of the above sectors, indicated that they feel productivity within their businessesneeds to ‘increase’ or ‘much increase’ in the next 6 months (October 2014 – March 2015) compared with the past 6 months (April – September 2014)

83%

81%

79%

79%

79%

77%

70%

65%

74%

Construction

Electronics

Aerospace

Food

Materials/Eng

Defence

Marine

Automotive

Respondents Respondents

29

26

28

24

42

31

23

26




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SME manufacturers report on their experiences recovering from recession


Productivity

29%

29% of SME manufacturers, thatindicated that they had been harmed by the recession, reported that their business had experienced an “export led recovery”.

Respondents 76

Export led recovery from recession

46%

46% of SME manufacturers, that indicated that they had been harmed by the recession, reported that their business was fully recovered.

Respondents 76

Recovery from recession




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Move from high end machine to knowledge; we have just achieved ISO13485. Hymid Multi-Shot Ltd

Plastic injection moulding & toolmaking

Grow to £5m in 10 years. Cygnus Instruments Ltd Ultrasonic thickness measurement devices

We are setting up a USA sales network to improve our export market. Graphic Plc

High quality PCBs

Getting our new low carbon factory in Chacewater up and running effectively. Carley’s of CornwallOrganic butters & spreads

Manufacturers’ Aspirations

Aerospace Rail

Food

Defence

Materials/Engineering

Electronics

Automotive

Pharmaceutical

Offshore Wind

Marine

Chemical

Nuclear

Innovation into new markets to expand. Demon International Ltd

Pressure washers

Growth! Omega Engineering Services

Design, manufacture & support

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Click on each company’s name to visit their website




http://www.hymid.co.uk/

http://www.cygnus-instruments.com/

http://www.graphic.plc.uk/

http://www.carleys.co.uk/

http://www.demon-pressure-washers.co.uk/

http://omega-oes.co.uk/

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The Economist’s Viewpoint


Economic Trends and Prospects for the South West

With increased concern about the risks to growth from a slowing of external demand, the latest MAS Barometer Survey provides timely insight into the performance and prospects for local manufacturers in South West England.

Although positive, the Barometer shows the region’s manufacturers losing momentum. Only 51% of respondents said sales turnover increased in this period, compared with 58% in the previous survey and a peak of 63% at the end of 2013. Indeed, orders and enquiries balances have slipped below 50%. Looking ahead, expectations for new hirings have moderated and investment intentions are, at best, flat. Generally, SW manufacturers are less positive than the national average.

A minority (41%) of SW companies considered themselves high growth businesses whilst as many as 64% (of a total of 118) said they had been hurt by the recession and only 46% have recovered fully to date. Only 29% said they had experienced an export-lead recovery. Market prospects remain very mixed across and within sectors.

Meanwhile, there has been unusual weakness in productivity since the recession. The Barometer finds that only 52% of local manufacturers (57% nationally) felt that they had raised productivity in the last six months. More importantly, however, 74% believe that productivity will have to increase in the half-year ahead, (ranging from 65% in automotive to 100% in pharmaceuticals). This ratio compares with 80% nationally: SW firms lag behind their peers.

Recent manufacturing investment has been more about replacement and refurbishment than about boosting productivity. A shift to strategic, productivity-driven investment is welcome and overdue. Hopefully, that is what this Barometer points toward, with SW manufacturers seeking productivity gains to sustain the recovery further.

Nigel F Jump Independent EconomistNovember 2014

MAS has invited an experienced economist to comment on the Barometer results.

Nigel Jump is chief economist at Strategic Economics. He has been appointed to provide an independent view on the Manufacturing Barometer. The comments expressed above are based on his professional experience and expertise and are in no way intended to represent the views of MAS or SWMAS ltd.

Strategic Economics is an independent economics consultancy with a wealth of experience across different industries.







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TPostscript

Methodology

• The Manufacturing Barometer survey was sent electronically to SME manufacturers based in England

• Percentages are given throughout

to the nearest integer value

• Given variability in sample and population sizes across questions respondent numbers are provided to allow for the calculation of confidence intervals

• MAS actively maintains a list of participants against the eligibility criteria

• Manufacturers’ comments are presented with permission and provide insight into a range of sectors and ambitions

• Small and Medium sized enterprises are

defined as firms that employ less than 250 full time equivalent (FTE) employees and either turnover less than €50m or have balance sheets of less than €43m

MAS Barometer

The Manufacturing Barometer provides a quarterly snapshot of SME manufacturers in England. It charts trends in turnover, employment and investment, alongside capturing ambitions and concerns.

The Barometer was begun by SWMAS Ltd. in the South West of England in 2009 before being offered for nationwide use in 2012.

The South West

For the purposes of this report the South West of England is the South West (England) NUTS area used for statistical purposes in the European Union. It comprises of the ceremonial counties of Somerset, Bristol, Gloucestershire, Wiltshire, Dorset, Devon and Cornwall.

SWMAS Ltd. delivers the MAS contract within the South West of England.

Manufacturing Advisory Service (MAS)

MAS works for England’s manufacturers. Funded by the Department for Business, Innovation and Skills (BIS) we provide a national service delivered locally by experienced advisors. We work with manufacturers to create business and product strategies. We help to develop cultures of innovation that generate new product ideas and market opportunities. We work to reduce waste and maximise profitability with individual businesses and their supply chains.

First launched in 2002, MAS continues to play a vital role in assisting thousands of manufacturers in England to share knowledge, improve productivity and achieve sustainable success in an increasingly competitive global economy.

We work alongside other organisations or alone to offer specific one-stop services for reshoring production, entering the domestic nuclear supply chain or working in the offshore wind sector.

If you are an SME manufacturer seeking to improve, or a larger enterprise looking to build or improve a domestic supply chain, please contact MAS to find out how we can help.




Help and Information

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Help and Information

Next Barometer – Your views are important to us:The MAS Barometer takes less than 5 minutes to complete and is an opportunity for your views to be heard. If you are an SME manufacturer based in England and would like to take part in the next quarterly MAS Barometer Survey please email: [email protected] stating that you wish to participate.

Barometer survey report information: Please email your question to: [email protected] information: Please contact [email protected] 0117 926 9923MAS support information:Please contact [email protected] 0845 658 9600

This Survey and Report is designed, analysed and compiled by SWMAS Ltd, for and on behalf of MAS. This report is only available electronically in PDF format.

Usage Conditions: The information and findings in this Barometer may be freely re-used in any online or offline publication and presentation, provided it is accompanied by the following credit line –

“This information was taken from the Manufacturing Advisory Service National Barometer Survey Report.”

Whilst every effort has been made to ensure the accuracy of the information supplied herein, SWMAS Ltd, the Manufacturing Advisory Service (MAS) and any of the contributors to this report cannot be held responsible for any errors or omissions that are revealed by future data revisions, new publications or policy changes, or for the consequences of actions taken by any party on the basis of the content of this report.

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Quarterly Survey Results (Q2) SOUTH WEST - SWMAS...2014 – March 2015) compared with the past 6...

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