Spring 2018-19 (Q4) South West


Welcome to the latest SWMAS Manufacturing Barometer, South West report. Mapping the trends across key growth and confidence indicators of the UK’s SME manufacturing sector performance, the findings represent the collective views of MDs and other senior decision makers who have sight right across their businesses.

Known for providing vital snapshots of sector past performance and six-month forecasts since 2009, this quarter the SWMAS Manufacturing Barometer asked respondents to consider the longer-term health of the sector. 

The aim is to look further ahead and examine where confidence sits for the business landscape in three years from now. We also wanted to get a sense in resource terms of what the sector is doing to ensure they realise the post-Brexit opportunities – last quarter the Barometer recorded the pragmatic resilience SME manufacturers are exhibiting as the country grinds through Brexit and the vital boost to sales fellow home-grown manufacturers could expect as the supplier base is moved back to the UK.

The findings promote considerations that we may be moving into a new manufacturing landscape and open our eyes to the role UK SME manufacturing businesses could play in the UK economy once the shape of Brexit has been decided.



Looking across the indicators for future sales, profits, investment and employment, the most striking find this quarter is that just 29% of businesses are planning to increase staff numbers in the next six months. This is the lowest figure ever reported in the SWMAS Manufacturing Barometer, even in the reports published immediately after the 2008/9 downturn and is also a drop of 18% compared to last quarter.

This may indicate a significant slump in confidence. It may also hide a wider revelation that many are finding it so hard to find appropriately skilled, qualified and motivated people that they are coming to terms with running and growing their business with fewer people. 

Investment intentions are flat, but the 6% rise in the number of South West manufacturers anticipating an increase in sales in the next six months could hint at a faith in their strategy – this is different to the national picture.

Reflecting actual performance over the past six months, 28% of UK SME manufacturers report they experienced a reduction in sales turnover (7% more than last quarter). Profits have also been affected with 38% of SME manufacturers reporting an increase (compared to 42% last quarter).

Instead, and as per aspirations of some shared in the last SWMAS Barometer, 49% of manufacturers chose to increase investment in premises and machinery. This is up on the 42% of those who increased investment in the previous quarter and shows that manufacturers are seeing through intentions to increase production capacity and improve efficiency – factors within their control during a time of uncertainty. 

These findings present hopes of a future rise in productivity as investments in equipment should feed a positive effect on capacity to do more, but with fewer people. We must consider if these investments are happening fast enough to compensate for the anticipated reduction in people - if capacity through investment fails to keep pace with any losses in capacity through people, this could have serious long-term implications for the sector.



It is apt, then, that our Special Focus chose to examine the longer-term health of UK SME manufacturing businesses as predicted by the sector leaders themselves. 

Leap ahead just 12 months, and the number of SME manufacturers expecting sales to increase climbs to 59% (mirroring the national picture). A year after that, a whopping 81% of manufacturers anticipate sales to increase (8% ahead of the national figures). Three years from now we can see that the figures start to even out, but still 84% of manufacturers forecast that sales will have increased.  

A more conservative outlook is initially observed amongst manufacturers when it comes to the longer-term forecast around investing in machinery and premises, although the message is again broadly positive. 

By this time next year, 48% of all South West SME manufacturers intend to increase investment in their business – an increase of 5% compared to this quarter’s figures. However, in three years’ time 67% of SME manufacturers in the South West anticipate investing more than they currently do in their businesses (11% more manufacturers than nationally).

Investigating the aspirations of the manufacturing leaders helps put these findings in context. Uncertainty around Brexit is certainly a factor as many manufacturers find their customers and distributors pulling up the proverbial drawbridge. Manufacturers are looking for greater sales once the ‘Brexit storm has been weathered’. Whereas for some Brexit has stunted growth, others are seeing new opportunities. 

Intentions to invest in new facilities, making the most of this time to improve efficiencies and develop new products, are reflected with the vision of achieving growth targets in the medium to longer-term.



The uncertain climate due to Brexit is a tangible concern for many. This continues to restrict what many manufacturers can, or are willing to, do to address their desire and ability to grow.

We need to unpick the causes of a potential drop in plans to recruit and whilst we can expect to see confidence returning once the Brexit fiasco is concluded, we need to look deeper at the whether we are moving into a manufacturing environment where businesses must learn to adapt to operating with fewer people. Whether by design or as an accident of fate, this will have deep implications for growth, investment in technology and automation and, ultimately, lead to a more productive manufacturing base.

The UK’s SME manufacturers can continue to have a significant positive impact on the economy as soon as Brexit has been clarified, but support is needed to help businesses to adapt to this new manufacturing landscape.

Download the full Spring 2018-19 Q4 South West Manufacturing Barometer report:

2018-19 Q4 Spring South West Manufacturing Barometer Report.pdf


Ready to identify opportunities in your business that will help you drive up profit, sales or productivity? Contact us today and discover what business improvement support and funding is available to assist you in achieving your goals:

[email protected]

Head Office: 01278 767 010