Summer 2018-19 (Q1) South West


Welcome to the SWMAS Summer 2018-19 (Q1) South West Manufacturing Barometer report. It provides a vital snapshot of the region’s SME manufacturing performance in the last six months and forecast for the next six months. Nearly 100 decision makers responded to questions on sales, profits, investment in machinery and premises, and job creation.

With concerns over the Brexit effect on export and international trade very much in the news, and manufacturers expressing in last quarter’s Barometer their interest in seeking new markets, we also decided to explore the sector’s export intentions in our Special
Focus. This seems timely as the results in South West show a slide in both past performance and confidence going forwards.

We took a closer look at whether manufacturers believe they can increase export sales, and what needs to happen in their businesses to achieve their growth goals.


Last six months

Reports of declining profit performance continues along with sales, investment, and employment.

Whilst an increase in sales was reported by 57% of respondents, this is the lowest figure we have seen since Q3 2016.

Those increasing their investment in new machinery and premises was recorded by 42%, down 7% from the 49% seen last quarter, which had been the highest investment figure seen in the last two years.

Similarly, whilst those recruiting staff holds steady with 44% experiencing an increase in staff recruited (in line with a trend seen over the last 12 months), over a fifth of the region’s manufacturers reported a reduction in staff numbers, a level last seen during the middle of the 2016 financial year.


Next six months

The number of South West’s SME manufacturers planning to increase their investment in machinery and premises remains flat and in line with lower anticipations for profits and sales in the short term. Both profits and sales figures have followed a downward trend since the leap in confidence we saw in Q3 2017.

Combined with 11% fewer of the region’s manufacturers intending to recruit staff (down from 58% last quarter), the figures suggest that SME’s in the South West are cautiously open to the opportunities that new equipment and space can offer, while anchoring themselves amidst expectation of a bumpy ride in the immediate future.

The aspirations recorded by South West SME manufacturers reflect concerns over Brexit - the current climate of uncertainty is front of mind, and perhaps a reason for the grit and determination exhibited by some to focus on consolidating their existing position. It is not all gloomy though, with some optimism seemingly fuelled by making the most of this challenging time to invest in capital equipment, staff development and new products. Interesting to note is that while very few manufacturers specifically refer to investing in automation, the majority of respondents who do, from across the national survey, are based in the South West of England.

The long-term view of South West manufacturers remains cautiously on growth and increased sales, but there are challenges ahead.



67% of all respondents currently export, and another 9% have plans to start exporting (some by working with other companies who export their goods). We looked at how these respondents expect to have increased their export sales in 12 months, and what the picture will look like two years from now.

Looking at those who already export alongside those planning to do so, we discovered that South West SME manufacturers expect an average increase in turnover of 1.4% to be generated by export sales in the next 12 months, and they more optimistically
anticipate this figure will be close to 10% in 24 months.



The export growth forecast supports a wider medium to long term view of growth and this is backed by businesses aspirations, which remain cautiously around growth and increased sales.

However, the trends and commentary suggest that, in line with the overall national view, South West SME manufacturers are already facing challenges and expect a bumpy ride as we finalise Brexit negotiations and actually go through the process of leaving the EU. We are therefore not surprised to see manufacturers focusing on stabilising and consolidating their current position, with some also investing in new processes, products and their staff, to help steady and ready themselves ahead of a period of uncertainty.

The region’s SME manufacturers are encouraged to actively look for opportunities and support to help them sustain their business and drive for growth through this time. We remain committed to helping businesses in the South West to do this.


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