Brexit uncertainty stifling South West manufacturers' export growth plans

Simon Howes, CEO Exelin Group
Simon Howes, CEO Exelin Group

Brexit uncertainty stifling South West manufacturers' export growth plans
Concerns over Brexit are stifling South West SME manufacturers' export growth as firms focus on stabilising their current position, according to recent figures.


The South West Manufacturing Barometer reveals manufacturers' fears over ongoing Brexit uncertainty, highlighting that their attention must be on consolidation, especially as they also anticipate an overall slowdown in increased sales coupled with a struggle to recruit more staff in the short term.


These are the headline findings of the latest South West Manufacturing Barometer, part of the UK's largest and widest-ranging survey of the SME manufacturing sector, conducted by SWMAS (part of the Exelin Group).
The sector's senior decision makers were asked about their aspirations, plans and fears, as well as their overall business performance in the last six months.


South West manufacturers who already send their goods overseas (67% of respondents) and those who plan to export (9%) together reported an anticipated average increase in turnover of just 1.4% generated by exports over the coming year (2018/19), compared to the national average of 2.1%.
The same group predicts exports will increase, on average, by 10 per cent between now and the summer of 2020, compared to the national figure of 12%.


"The picture emerging from our research is of a sector focused on consolidating what they already have for at least the next 12 months, by when we will finally know what a post-Brexit UK will look like," said Simon Howes, CEO of Exelin Group.


He continued: "Whilst South West manufacturers' cautiousness about export growth amidst the current chaos is no shock, it is encouraging to see their ambitions for 2020.


"Not only does this reflect the vision of our region's manufacturers, it also shows that for a large and influential part of our economy there are many optimistic signs of life after Brexit."


The Barometer also revealed slow growth when it asked South West SME manufacturers to reflect on their performance in the last six months.
According to the survey, whilst over half (57%) reported an increase in sales, this was in fact the lowest figure recorded since Q3 2016.
Those investing in new machinery and premises dropped to 42%, compared to the previous quarter's 49%, and this was broadly in line with the national picture.


Turning to recruitment, 44% of South West manufacturers increased headcount, but this was partly offset by more than a fifth who reported a reduction in staff numbers, sending overall recruitment numbers for the region back to levels not seen since the middle of 2016.


This trend looks set to continue, with the number of manufacturers looking to recruit between now and the end of the year dropping to 49%, well down from last quarter's 58%.


"Brexit is clearly foremost in the minds of South West manufacturers," said Simon Howes, CEO of Exelin Group.


"Many of the region's firms are adopting a strategy of consolidating and maximising their current opportunities, whilst making the most of this uncertain time to invest in capital equipment, staff development and new products, ready to take on the challenge - and opportunities - once the UK finally leaves the EU."


Simon Howes continued: "Our South West Manufacturing Barometer highlights a medium-term view of growth centred around a difficult ride for the next year as we navigate the choppy waters of Brexit.


"Our region's manufacturing companies are looking towards a period of stabilising and consolidation and, beyond that, will be looking to kick-start their growth, particularly in exports, once we finally leave the EU."


For more information about the SWMAS Manufacturing Barometer go to www.swmas.co.uk or email info@swmas.co.uk.

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