Mapping the opinions and performance trends of the South West SME manufacturing sector.
THE REGIONAL 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 across the region 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 South West SME manufacturers in sales, profits, investment (machinery and premises) and sales.
LAST SIX MONTHS
Findings were largely in line with those seen in the previous Barometer, which revealed some of the worst performance for a decade. Only 24% of respondents reported an increase in profits over the past six months - 4% lower than the national result. Recent turnover is also reported to be lower in the South West than nationally, with only 32% of regional businesses reporting an increase over the past six months - a number that has almost halved in three years (from 63% in Q4 2017). Unsurprisingly, recruitment has also been at an all time low across the South West, with the figure steadily dropping since the end of 2018. This highlights that businesses have not been in a position to invest over the last two years.
NEXT SIX MONTHS
Although slightly lower than the national picture, 55% of the South West based SME manufacturers questioned are expecting their future sales to increase over the next six months - the highest percentage in over a year. Those predicting a reduction in sales is also down by 4% compared to Q2. In line with these findings, 49% expect their profits to increase going forward, which is the most postive regional profit prediction the Barometer has recorded since the end of 2017.
When it comes to future capital investment, 54% of South West respondents predict an increase over the next six months (up 16% on last quarter and higher than the national expectation). With only 10% questioned expecting investment to drop over the coming months, this indicates that SME manufacturers in the region now feel adequately confident to invest now for future business growth.
SPECIAL FOCUS: CONFIDENCE GOING FORWARD INTO 2020
With the general election and Brexit plan now decided and underway, we wanted to uncover the impact this will have on SME manufacturing across the South West. Results show that the majority of respondents (42%) 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 results this quarter indicate that political certainty appears to have improved clarity, resulting in a (partial) return to confidence in future sales and profits amongst SME manufacturers in the South West. The regional Barometer report is largely in line with the national picture. Though past profits were lower than recorded nationally, future investment is predicted to be higher in the South West. This could indicate that businesses are beginning to look postively towards the future again after experiencing some very tough times.
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 across the UK 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 South West.
Download the full Winter 2019-20 Q3 Manufacturing Barometer South West report: