To tackle the problem, Nick Clegg and Vince Cable have asked the country’s most innovative manufacturers to throw open their doors to students and teachers. This week-long national event is the first of its kind, offering an insight into engineering and manufacturing.
Led by strong growth in export orders – particularly from emerging markets – British manufacturing will tackle the impact expected from spending cuts head on, says manufacturers’ organisation EEF.
Last year, the manufacturing sector outpaced expectations by expanding by 3.8 per cent.
This year, another strong result is forecast, with 3.5 per cent growth for manufacturing, compared to just 2.1 per cent growth for the economy as a whole. In 2012, growth is forecast at 3 per cent and 2.6 per cent respectively.
Research by the Engineering Employers Federation (EEF) discovered that the UK’s manufacturing sector is in good health and has reported strong trading conditions for the third quarter in succession.
The EEF survey also revealed that manufacturing will outperform the rest of the economy by the end of 2011. However, it warned that next year will still bring challenges to manufacturing as companies deal with rising costs and uncertainty.
Research by the Confederation of British Industry (CBI) found that 31% of small and medium sized manufacturing firms expect the volume of total new orders to rise, with domestic orders expected to increase over the next quarter.
Furthermore, a separate report by Markit and the Chartered Institute of Purchasing & Supply, discovered a strong demand for boosting production had been reported in the industry for the first time in seven months, calming fears that Britain may slip into a double-dip recession.
According to EEF, the manufacturers’ organisation, workers in the industry, including those in sales recruitmentposts, have welcomed the “greater clarity” that the government has provided on its tax and spending plans and on how it will play a smaller role in the economy.
British manufacturing is at risk of “collapse” due to a worsening skills shortage that will leave thousands of hi-tech jobs unfilled over the next five years, a senior academic warns today.
Prof John Bryson of the University of Birmingham’s school of geography will tell an international conference on wealth creation that although the sector is thriving in terms of output, its future is bleak because of the failure of the education system to produce school leavers and graduates with the right expertise.
According to Bryson’s research, manufacturing produces more now in equivalent value of products than it did in 1966, the peak year for manufacturing employment in the UK. But companies fear their businesses may not survive into the next decade because of their inability to recruit employees with the right expertise.
Stronger demand and companies rebuilding stocks of goods helped boost production among the UK’s smaller manufacturers during the last quarter, according to the Confederation of British Industry’s (CBI) latest quarterly SME Trends Survey.
Just over 40% of small firms surveyed by the CBI said output rose in the three months to July compared to 20% that said it fell. The resulting balance of +21% is the fastest growth since April 1995 (+25%), and a marked improvement on the previous quarter.
‘Smaller manufacturers enjoyed a bumper quarter with production ramped up to meet growing demand and to rebuild stocks,” said Russel Griggs, chairman of the CBI’s SME Council.
“Exports are leading the charge, reflecting the pick-up in global trade and the relative weakness of sterling, but firms are still seeing their profit margins squeezed because of rising costs.”
Looking ahead to the next quarter, the report states that firms anticipate a slight fall in output, as the trends in domestic and export orders are expected to weaken.
Small and medium-sized businesses are responding to the recession by innovating and creating new products, according to data released by the Federation of Small Businesses (FSB).
The survey of 10,000 small businesses revealed that 53% of businesses introduced new or improved products and services last year and 51% intend to continue innovating next year.
This innovation is helping many small companies survive the recession, with 30% of the respondents saying their sales volume had increased over the last financial year.