West Midlands manufacturers see continued growth - survey
West Midlands manufacturers are continuing to see strong growth prospects as economies continue to open up and the economic recovery strengthens, according to a major survey published today by Make UK and business advisory firm BDO.
Having seen a 10 per cent decline in output in 2020, the manufacturing sector in the UK overall is now set to recover a significant amount of that loss in 2021, with forecasts suggesting it will have recovered the total loss from last year by the end of 2022.
Make UK, the manufacturers ' organisation, is the representative voice of UK manufacturing and collectively represents 20,000 companies.
The organisation noted that supply chain disruption and some labour shortages could hamper this improving picture in the final quarter of the year. The slow recovery in the automotive sector where the West Midlands has a high exposure could also have an impact for some time.
In particular, both UK orders and total orders were strong for West Midlands companies with the total order balance of +54 per cent very robust by historical standards.
While output fell slightly, due to a reduction in car production in the last quarter, the business confidence indicator remains positive and points to continued growth for the immediate future.
Charlotte Horobin (pictured), region director for Make UK in the West Midlands said: “West Midlands companies are continuing to see positive growth conditions as prospects continue to accelerate for manufacturers with economies at home and abroad continuing to open up. However, the mixed prospects for the automotive sector, supply chain shortages and the rapidly escalating increase in shipping costs are threatening to put roadblocks on the road to faster growth despite the current optimism. ”
Despite the robust outlook, both investment and recruitment intentions in the Midlands were below the UK average.
Make UK is now forecasting growth for the sector of +7.1 per cent in 2021, tailing off slightly to +4.4 per cent in 2022. However, should these be met it will ensure the sector has recovered all the lost output from 2020.
Jon Gilpin, head of manufacturing for BDO in the West Midlands, said: “West Midlands manufacturers have proved their resilience over and over again, but we know big challenges remain.
“While our latest analysis provides some really promising results, increasing costs, rising inflation and the ongoing battle to attract and retain skilled workers locally will continue to stress-test regional manufacturers for the remainder of the year. ”