3 minute read - 28th March 2024
Regional manufacturers forge ahead despite national challenges
Made in Group’s inaugural Manufacturing Growth Report paints a largely positive outlook, with UK manufacturers countering uncertainty by investing in both current stability and future continuity. Industrial businesses across the Midlands, Yorkshire and beyond have shown remarkable growth over the past 12 months, despite facing challenges on multiple fronts, underscoring the sector’s renowned ingenuity and determination.
Three in four, 74%, experienced overall growth, with more than one in two, 54%, seeing growth rates of 10% or higher. However, the three-fold increase in firms experiencing contraction, rising from 4% to 12%, highlights the challenges faced and the need for strategic agility. Looking forward, Directors express a mix of bullish optimism and caution for the coming year. The majority of companies, 92%, forecast expansion, with more than a third, 36%, anticipating growth of 20% or more.
While the appetite for reshoring appears to have diminished, dropping by a third from 18% to 12%, there remains a hunger for establishing local supply chains and strategic outsourcing. The sizeable decrease in passing on increased costs to customers, from 40% to 28%, suggests a balancing act as manufacturers seek to maintain competitiveness while absorbing certain cost pressures internally.
Never miss the latest manufacturing news by signing up to our newsletter here
The Manufacturing Growth Report shows manufacturing businesses are exhibiting bullish confidence despite numerous headwinds, with three in four anticipating substantial growth over the next 12 months / Picture: Getty/iStock
Tracking industrial business growth
Set up to champion and promote UK industry, Made in Group – comprising Made in the Midlands and Made in Yorkshire – is a peer-to-peer membership association with more than 500 members representing all sectors of manufacturing and engineering. Approximately 85% of members are owner-managed small and medium-sized businesses.
Made in Group’s series of Big Reports tracks industrial business growth and the strategies manufacturing organisations are executing in response to challenges and opportunities. In addition, each survey spotlights a key trend impacting the manufacturing sector, including People & Skills, Sustainability, Smart Factories and International Trade. This quarter’s report focused on Risk Management and Succession Planning.
Manufacturers taking a strategic response to uncertainties
Manufacturing businesses face unique challenges, including market volatility, regulatory compliance, operational complexity, supply chain disruption and a need for continuous innovation. Risk management is a key factor in overcoming or mitigating these challenges, alongside being a driver of long-term success, responsiveness and competitiveness.
It’s encouraging to see two in three industrial Directors, 63%, prioritise effective risk management through regular formal assessments. However, the fact that almost a third adopt an ad-hoc ‘as needed’ approach is concerning. While this may indicate a dynamic and responsive strategy, it also leaves businesses vulnerable to unforeseen challenges.
Succession planning, particularly in manufacturing, is more important than ever given the current trading landscape, demographic shifts and global complexities. With a significant number of employees approaching retirement, succession planning is crucial for a smooth transfer of knowledge and skills from experienced leaders to future generations.
The report highlights that over the past 12 months, one in two manufacturers experienced double-digital business growth / Picture: Getty/iStock
Directors present a mixed picture of succession planning practices, with less than a third, 30%, claiming well-established practices. Further encouragement should be taken from the three in four, 77%, who have reportedly identified successors, albeit largely informally.
Jason Pitt, CEO of Made in Group, said: “As our Manufacturing Growth Report reveals, regional manufacturers, particularly SMEs, have shown remarkable resilience and determination in the face of multifaceted challenges. Made in Group remains committed to championing and promoting the manufacturing sector, recognising its vital role in the UK economy. Despite the hurdles ahead, our members continue to invest in stability and plan for the future, showcasing the industry’s renowned ingenuity.
“As we navigate uncertainties together, it’s imperative that we prioritise effective risk management and succession planning to ensure the longevity and success of our businesses. Together, we can overcome obstacles and seize opportunities, driving growth and innovation in the manufacturing landscape.”
