A record number of small manufacturers in the West Midlands are looking to take on staff as recruitment confidence hits a three-year high.
Nearly two thirds of companies questioned for the Manufacturing Advisory Service’s Barometer are looking to create new jobs, marking a 17 percentage point increase on the same period last year. This is the highest level of confidence in staff recruitment seen in the history of the report.
Firms are looking to take advantage of new opportunities, including expansion and reshoring of supply chains in automotive, aerospace, and nuclear sectors.
These encouraging figures are reinforced by growth in sales: 62 per cent reported an increase in the previous six months, and over three quarters expect to win more work between now and October.
Responses also reveal an appetite for investment in new plant and machinery (71 per cent) and in developing new technologies (64 per cent).
Business Minister Michael Fallon said: “Britain’s manufacturers are helping drive the UK economic recovery. Through our industrial strategy and economic plan, the government will continue to work closely with this vital sector to ensure that confidence stays high, creating more highly skilled jobs and a stronger economy for everyone.”
Lorraine Holmes, area director of MAS in the North and West, commented: “We have seen consistent signs during the last 12 months that firms are ramping up capacity to meet increasing orders and take advantage of work coming back to the UK.
“This is the clearest signal yet that our manufacturers believe the upturn is sustainable. Two record figures for recruitment and investment in technology suggest that many small manufacturers in our region are planning for the long term and, encouragingly, they are taking action now to manage future expansion.
“Our Barometer report highlights that small and medium-sized manufacturers are contributing strongly to jobs growth and expect to continue to recruit. They may find it harder to follow this trend, especially in advanced manufacturing sectors, unless they invest in training and retention.”
These predictions for expansion in the MAS Barometer are taking place against a backdrop of rising energy prices across industry.
Eighty-five per cent of small and medium-sized manufacturers reported an increase in their energy costs over the last year, only part of which is explained by increased production. Six in ten of those SMEs were hit with rises of 6 per cent or more.
Most companies looking to reduce their energy costs have taken measures to cut their bills. These include enhanced heating or lighting systems (43 per cent), changing energy supplier (34 per cent), streamlining processes (32 per cent) and upgrading machinery (29 per cent).
While more than half of manufacturing SMEs measure heating and lighting, other significant energy uses are poorly monitored.
Tellingly, just 37 per cent of firms monitor usage for plant and machinery and less than a third admitted to keeping track of energy used in processing raw materials.
Lorraine concluded: “Managing energy costs is a major concern for West Midlands manufacturers, but sometimes this gets overlooked when they are focused on growth and the day-to-day challenge of meeting ever-changing customer requirements.
“MAS advisors can help with this by preparing the right strategies for growth, covering the customers, products, equipment, people, resources and finances necessary for sustainable growth.”
Telford-based Advanced Chemical Etching was one the companies questioned in the latest MAS Barometer, and reflects the growing trend of positivity, investment and job creation.
The firm, which offers precision components, prototyping and low-volume production, has spent over £1m on extending its production footprint from 10,000 sq ft to 23,000 sq ft, and in the installation of a number of specialist etching machines.
Backed by more than double its previous capacity, ACE has been able to embrace increases in demand for the supply of technically challenging products and new materials.
“The start of this year has seen an influx in the number of large development orders, which have the potential to turn into high-volume contracts for clients involved in energy, medical and aerospace,” explained managing director Ian Whateley.
“If just 20 per cent of the potential orders turn into reality then we could treble the size of the business by 2017. I’m not sure if this is an exciting prospect or literally frightening!”
He continued: “We’ve already taken on seven staff, with three more planned in the next few months. When you combine this boost with the additional space and new technology, we’re well placed to launch this massive expansion.”
ACE, which boasts annual sales of nearly £4m, supplies components for use in next generation aircraft, F1 cars and medical implants, and in heat exchanger/fuel technology.
One area where it leads the field in is the development of new processes, including titanium etching and integration of other exotic materials.