The proportion of manufacturers anticipating growth in their business is significantly down, with Brexit and even survival clearly on people’s minds.
51% of UK SME manufacturers expect their sales turnover to increase in the next six months – 13% fewer than last quarter, continuing a downward trend seen over the last year and at a level not seen for six years.
Coupled with nearly 1/5 of manufacturers expecting a reduction in sales in the run up to March 2019 and reflecting that 28% have already experienced a reduction in sales in the last six months, details of the challenging landscape now faced by UK manufacturers emerges.
The picture worsens when we look at expected profits. Just 39% of manufacturers anticipate an increase in profits and 24% are actively looking at a reduction in profits, in the next six months. Again, these are the lowest forecasts we have recorded and a likely reflection that manufacturers expect to face additional costs in the future.
This reduction in confidence is also evidenced by just 37% of manufacturers stating they will increase the investment in their business (dropping from 52% last quarter), and only 34% aiming to employ more staff (a fall of 12%).
As manufacturers put the brakes on employing more people and investing in machinery and equipment, we look to where their aspirations lie. Although some are clearly placing themselves in survival mode, UK manufacturers still have the determination to grow with many looking at ways to change and adapt. Intentions to export, develop new products, control costs, invest in their existing staff, improve their efficiency and productivity and other changes to business strategy emerge as ways to generate sales and improve their profitability. Brexit and the lack of clarity it brings is certainly a significant factor in the concern manufacturers have for the future of their business.