Industry set for further decline

UK manufacturing is set to contract further despite manufacturers responding better than in previous recessions, according to a report by the Management Consultancies Association (MCA).

The report found that more then three quarters of British consultants expected the sector to shrink further and warned that it would be unable to generate sufficient jobs to offset the 188,000 that are expected to be lost in the industry by the end of the year.

According to the study, the manufacturers will face the challenges of adapting to a new business landscape following the recession. Two thirds of those surveyed believe that demand will be harder to predict in the future, with the majority agreeing that collaboration between manufacturers and retailers will be significant.

The report also claims that inability or unwillingness to invest combined with a lack of funding, innovation and leadership are likely to hinder manufacturers during the recovery.

Alan Leaman, chief executive of the MCA, said: ‘While the worst of the recession may be over for the manufacturing sector, it is important that manufacturers do not take their eye off the ball. There is still much to do to bring the sector back to health in a “new norm” for business that will be fundamentally different to what has gone before.’

Tim Lawrence, from the PA Consulting Group, added: ‘Most manufacturing in UK is relatively lean, and the weak pound is helping exports. The real challenge is to ensure that the supply chain does not limit the UK’s competitiveness.’

In an attempt to combat lack of funding and leadership, a Manufacturing Taskforce has been launched by regional development agency, Yorkshire Forward, to outline a ‘Blue Print for Manufacturing’ that will help businesses make the most of the upturn.

The blueprint will identify priority areas where help should be focused, with the Taskforce providing support to manufacturers in the form of financial mentoring and business strategy advice to find the best routes to access support.

Richard Wright, chairman of the Taskforce, said: ‘We need a balanced economy in which manufacturing plays a key role. In Yorkshire and Humber that now means the advanced engineering and materials, digital technologies, chemical and healthcare industries working towards a brighter future ahead, with our strategic support.

‘The recent move towards low-carbon industries also represents an investment in a sub sector that has many years of opportunity in front of it. These avenues of success must be built upon and we have worked directly with businesses to explore and exploit those opportunities, as we build a working strategy for the sector to get it where it needs to be in 10-20 years.’