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UK Manufacturing - dig a little deeper

In June 2016, a national vote was held and a small island in Western Europe (that just happens to be the 8th largest Industrial Nation in the world) took the historical decision to leave the European Union. Nearly 16 months later, uncertainty seems to be the only thing we are actually certain of.

The pound has certainly seen a fall from grace – ask anyone who has taken a holiday to Europe since the referendum! But, what does that mean for the UK Manufacturing?

UK Manufacturing

The pound has certainly seen a fall from grace – ask anyone who has taken a holiday to Europe since the referendum! But, what does that mean for the UK Manufacturing?

As things stand, 45% of UK exports come from our Manufacturing sector – and it keeps growing. At Interim Partners, we keep seeing an increase in demand across the board – from FMCG to Aerospace, with ‘external markets’ wanting to capitalise on cheaper products. 

All the recent statistics confirm that UK Manufacturing has been consistently growing in the last 12 months – despite the increased costs of overseas imports.

So it’s a good thing, right?

Surely we should all be getting the champagne of ice, ready to toast the wonderful renaissance of such an important area for the country? Actually (taking in to account a slight tempering in the growth in September), we should proceed with caution.

The demand remains high, but having to keep up causes serious challenges to the UK Manufacturers.

Do they just leave the lights on longer and peddle harder, do they miraculously build another factory in record time? It is certainly not a case of asking the factories to ‘make more’. It takes time, investment, planning – and a lot of hard work.

According to a CEO of a market leading Defence and Aerospace Manufacturer, a number of UK Manufacturers feel they need to increase their production capacity on average by up to 10% for the next 2 quarters in order to cater for the increased demand for their products – so what will they do to meet these targets?

The strain could start - and already has in some cases - to have a real impact on the performance of our factories. 

Pressure on staff is increasing. When you throw in to the mix a very real chance that the UK could start to experience net-emigration of both semi-skilled & skilled factory workers who feel they would rather be paid in Euros (the signs are already there)… it is evident that leaders within the Manufacturing community have their work cut out.

So, Brexit - good for UK Manufacturing? That’s what the numbers would suggest, but dig a little deeper. This growth must be sustainable & maintainable, which leads us to the question:  how can we achieve this?

Automation, Digitalisation and 4IR are thrown around most boardrooms – but how and when to do it? What is the most cost effective and efficient way to do this without impacting current production?

Whether your stance was to leave or remain, there is no doubt that even with an increase in costs of imports, the UK Manufacturing sector has and will continue to benefit from the current economic and political climate.

But it is not a straight line to the top of the mountain. It requires a plan, foresight and the courage to take the right steps now so that in the coming years manageable growth can be achieved.

Whilst many other industries could potentially have prolonged periods of uncertainty (I hope not), UK Manufacturing could be a shining light of solid and consistent growth – that is if the factories don’t burst at the seams.

Who knows, perhaps industry leading interim managers with proven expertise in this field could be of unparalleled value…

 

Laurence Frantzis is the Director of Manufacturing at Interim Partners

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