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West Midlands Manufacturers Remain Optimistic About Future Growth

West Midlands’ manufacturers remain optimistic about their future growth prospects, but are cautious of the impact leaving the EU could have on their expansion plans and pointed to the role of Government, not only in this, but also addressing the skills shortage via schools, according to respondents to this year’s MHA MacIntyre Hudson’s Manufacturing and Engineering survey.

The survey, now in its fifth year, collated responses from more than 550 SME manufacturers and engineers across the UK, has been compiled by Made in the Midlands patrons MHA MacIntyre Hudson supported by fellow patrons Lloyds Bank Commercial Banking.

It suggests almost three quarters (73%) of firms in the region are positive about their growth prospects in the coming 12 months, but concerns over the way Brexit negotiations would go had checked this, with 42% of businesses perceiving this uncertainty to be a barrier to growth.

Alongside this major concerns remain over the skills shortage affecting the sector and the apparent lack of support for firms following the demise of services such as the Manufacturing Advice Service and Growth Accelerator.

In terms of skills 42% of firms questioned said they were hoping to recruit over the next 12 months, but the inability to find skilled staff to do the job remained a major problem for almost two thirds (61%) of those businesses.

Half of all respondents put Government action on this at the top of their agenda. Unfortunately, beyond pushing the academic end of STEM, substantial action has not been forthcoming, nor is their a sign that this is going to change in any radical way. The Government appears to see secondary education, and the reintroduction of grammar schools, as an educational priority whilst seemingly ignoring the fact that developing a more balanced system with a vocationally focused alternative should be the priority if we are to home grow our future engineers.

The overwhelming majority (96%) of West Midlands companies believe their production costs will rise in 2016/17 due to the increasing cost of raw materials together with higher wages.

As a result, productivity gains are being seen as important in bringing down costs, as 60% of firms have said they felt unable to pass the additional costs onto their customers.

Chris Barlow, partner at MHA MacIntyre Hudson in Birmingham, said: “The outlook for Midlands’ businesses remains strongly positive in terms of projected growth, although the result of the EU referendum has added uncertainty and affected confidence. The challenge remains – to deliver the projected growth given the difficulties in recruiting the right staff.”

“There is much to play for as we face the new reality of a United Kingdom outside the EU. There will be challenges, but there will also be massive opportunities which we must grasp and take advantage. The sector will adapt and thrive but the government could show real leadership by investing in actions around a new industrial strategy and this includes a long term answer to the skills shortage by looking at vocational routes into engineering at secondary school level.”

Andy Moss, Area Director for Manufacturing at Lloyds Bank Commercial Banking in the West Midlands, added: “Manufacturing has never been more important to the success and growth of the British economy, and continuing to work closely with firms through this evolving economic landscape will ensure they maintain their competitive position in domestic and global marketplaces,” he added.

Last modified on Monday, 28 November 2016 16:14

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