Editor’s comment for July 2021

In terms of the mood of the industry, the latest ‘Manufacturing Outlook: 2021 Quarter 2’ from Make UK/BDO is pretty much spot on.

There is a clear positive vibe running through the manufacturing industry at the moment, and as the report states, there’s genuine confidence about the future. It’s not going to be easy and there’s plenty of oil slicks and potholes to circumnavigate, but recent months have demonstrated that the sector is capable of generating growth despite far from favourable conditions.

In his foreword, Stephen Phipson CBE, chief executive of Make UK references a triple threat to the sustainability of recovery seen in Q2: the novel Trade Cooperation Agreement (TCA) between the UK and the EU; unpredictable COVID-19 restrictions at home and abroad; and supply chain disruptions due to spikes in demand which in some cases are impacting lead-times.

I’ve seen this first hand with a subcontractor I visited recently who was having real problems sourcing raw sheet steel material economically. COVID caused supply chain challenges anyway, but now, somewhat ironically, the recovery is exacerbating the problem as demand outstrips supply.

The TCA with the EU was always going to be prickly at best, and at the beginning of the year, exporters felt the pain with a 40% drop in exports to the EU. Since then however, resilience and resourcefulness has prevailed with significant export improvements as companies wrestle with the new regulations.

On the subject of COVID, we’ve made leaps and bounds with the vaccination programme which has been a real success – but this virus is the wriggliest of worms and we have to get used to the fact that it’s not going anywhere fast; it will mutate as viruses do resulting in potential regional spikes.

We have to work around it. Manufacturing is a global industry that despite all the niceties of Zoom calls, Teams meetings and other virtual get togethers, thrives on face to face contact.

The problem is COVID uncertainty continues to impact on international travel which in turn affects confidence regarding trade shows and exhibitions. The subsequent ever changing quarantine regulations in the UK and abroad certainly aren’t helping either. Neither are the constantly changing roadmaps out of lockdown which seem as much politically motivated as they are health orientated.

Depends on whether you trust the Government I guess? They’ll do what they want anyway.

Domestically however, things seem to be steaming ahead on the event front: Subcon, TCT, Southern Manufacturing, Advanced Engineering, Digital Manufacturing Week 2021 and MACH 2022 of course are all lining up on the starting grid.

So overall, I think bearing in mind where we were this time last year, most of us would be pretty happy with where we are now and there’s plenty to be optimistic about. The resourcefulness of the industry; the fantastically successful vaccination programme and the clear evidence of real growth despite the conditions, bodes well for the future.

Take a look at the Make UK/BDO full report here: https://www.makeuk.org/insights/reports/manufacturing-outlook-2021-q2

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