Autumn 2018-19 (Q2) South West


Welcome to the SWMAS Autumn 2018-19 (Q2) Manufacturing Barometer report for the South West. More than 130 senior decision makers in SME manufacturing businesses across the South West recorded their views.

Alongside the core questions on sales, profits, investment and staff levels, this quarter we asked UK manufacturers to review the ‘Brexit readiness’ status of their company. The findings provide vital insight into the confidence and performance, both past and forecast, of a key contributing sector to the UK economy at a time of significant uncertainty.


The proportion of manufacturers anticipating growth in their business is notably down, with Brexit and even survival clearly on people’s minds.

56% of South west SME manufacturers expect their sales turnover to increase in the next six months - 5% fewer than last quarter, continuing a downward trend seen over the last year.

Coupled with 1/5 of manufacturers expecting a reduction in sales in the run up to March 2019 and reflecting that 28% have already experienced a reduction in sales in the last six months, details of the challenging landscape now faced by South West manufacturers emerges.

The picture worsens when we look at expected profits. Just 40% of manufacturers anticipate an increase in profits, and 24% are actively looking at a reduction in profits, in the next six months. Again, these are the lowest forecasts we have recorded and a likely reflection that manufacturers expect to face additional costs in the future.

With this reduction in confidence, 41% of manufacturers stated they will increase the investment in their business (dropping from 48% last quarter), and only 35% aiming to employ more staff (a fall of 12%).

As manufacturers put the brakes on employing more people and investing in machinery and equipment, we look to where their aspirations lie. Although some are clearly placing themselves in survival mode, UK manufacturers still have the determination to grow with many looking at ways to change and adapt. Intentions to export, develop new products, invest in their existing staff, control costs, improve their efficiency and productivity and other changes to business strategy emerge as ways to generate sales and improve their profitability.

Brexit and the lack of clarity it brings is certainly a significant factor in the concern manufacturers have for the future of their business.



Nearly half of the South West SME manufacturers surveyed predict that Brexit is detrimental to their business in the short term or threatens their survival. Compare this to 35% saying they are confident or optimistic about the new opportunities ahead.

With more planning for the risks than opportunities, and with around 15% with no plan at all as to how to approach or manage the impact of Brexit, this validates the concern that Brexit could damage some UK SME manufacturing businesses.

Further exploring manufacturers’ readiness for the impact of Brexit, the most striking discovery is that some manufacturers are stockpiling raw materials. Concern about their supply chain is also expressed through intentions to strengthen existing relationships and work more closely with their suppliers, or develop new, non-EU or UK-based, supply chains.

This approach is also reflected on the customer side. Manufacturers say they want to develop a closer relationship with their existing customers, whilst also seeing a need to increase their customer base. Exporting outside the EU is seen as a tangible route to finding new customers for some.



Driven by a lack of clarity around what Brexit will actually mean and how the transition arrangements will work, there is a strong sense that many manufacturing businesses are battening down their hatches to weather a potential storm.

Others are taking a pragmatic approach where ever they can. In the absence of a full picture of what Brexit means, we are encouraged to see manufacturers making plans around the things in their control: export, improving efficiencies, strengthening relationships with their customers and suppliers, and increasing stock being some examples.

In a quarter that reveals the lowest ebb of confidence since the Manufacturing Barometer was created in response to the 2008 downturn, there are opportunities that can help SME manufacturers survive and maximise their profitability through what many expect to be a challenging time.


Download the full Autumn 2018-19 Q2 South West Manufacturing Barometer report:

2018-19 Q2 Autumn South West Manufacturing Barometer Report.pdf


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