Mapping the opinions and performance trends of the UK’s SME manufacturing sector.
THE RESULTS ARE IN FOR 2019 Q3...
This quarter's report sees the first results following the decisive general election, and reveals that SME manufacturing businesses are feeling more positive going into 2020 now that a Brexit decision has been confirmed.
Every quarter, the SWMAS Manufacturing Barometer records both the actual and projected performance of UK SME manufacturers in sales, profits, investment (machinery and premises) and sales.
LAST SIX MONTHS
Unsurprisingly, the performance in the six months leading up to December continued to be depressed. Results were largely in line with those seen in the previous Barometer, which revealed some of the worst performance for a decade. This quarter shows there has been little change for the sector in the last six months. Although sales have remained steady, staff numbers appear to have been on a slow decline since the end of 2018, highlighting the fact that businesses haven't been in a position to invest in this area. Only 28% of respondents have seen an increase in profits, while over a third have reported a reduction (though this is 5% less than Q2...will this trend continue to build a more positive picture throughout 2020)?
NEXT SIX MONTHS
The results this quarter show a more positive outlook than we have seen in recent reports. Although there is still a good deal of uncertainty (some still feeling downbeat regarding their future business prospects) 60% of respondents expect their sales turnover to increase over the coming months. With only 17% expecting a reduciton in sales, this is the most positive prediction since the beginning of 2018.
51% of respondents expect to invest in new machinery and/or premises in the next six months (up 14% from the previous quarter). Likewise, 54% of those questioned expect an increase in profit going forward...the highest number since 2018 Q1. Considering only 28% reported an increase in profit over the last six months, these findings show that businesses appear to be expecting a postive change.
SPECIAL FOCUS: CONFIDENCE GOING FORWARD INTO 2020
With the general election result and Brexit plan decided and underway, we wanted to uncover the impact this will have on SME manufacturing in the UK. Results show that the majority of respondents (46%) are more confident about the future performance of their business now that they know the road we are taking and can therefore plan accordingly.
In conclusion, the findings this quarter indicate that political certainty appears to have improved clarity, resulting in a (partial) return to confidence in future sales and profits. This, in turn, should lead to an increase in investing and recruiting, which certainly appears to be the expectation throughout the UK SME manufacturing sector. The comments provided by Barometer respondents, and our day to day contact with businesses on the ground, indicate that the recent clamping down of investment and recruitment is not only easing, but money to be spent on new machinery/premises/staff is expected to increase over the coming months. Customers are now coming forward with plans which were previously on hold, which will hopefully result in the future growth of SME manufacturing across the UK.
Download the full Winter 2019-20 Q3 Manufacturing Barometer National report: