The South West’s manufacturers have seen a strong start to 2022 and are leading the country in job creation, a new survey reveals.
The latest quarterly Manufacturing Outlook survey from manufacturers organisation Make UK and business advisory firm BDO shows the region’s factories were buoyed by very strong domestic orders - the highest level of any UK region.
And overseas orders also remained strong as a reflection of world markets which have rebounded throughout the course of the past 12 months.
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According to the survey, total output in the region performed strongly at a positive balance +56% which is the highest figure for any UK region and almost double the level of output seen in the final quarter of last year.
The region also benefited in the past few quarters from an emerging recovery in the aerospace sector together with increasing investment in renewable energy.
This performance is reflected in the jobs outlook across the region with the highest level of recruitment intentions in the UK as companies hire to meet demand. Investment intentions on the back of this are also very positive by historical standards.
As with the national picture, the big challenge for companies, in addition to attracting and retaining talent, remains the escalating inflationary pressures which are forcing companies to raise prices at record levels for the fifth successive quarter.
In response to the rapidly escalating costs, Make UK is urging the Chancellor to use next week’s Spring Statement to take whatever measures are necessary to support companies dealing with rapidly increasing energy prices in particular. Make UK has called on the Chancellor to delay the proposed increase in National Insurance due to come in April 2022.
Make UK has forecast growth for manufacturing in 2022 of +3% and Jim Davison, region director in the South for Make UK, said: “Manufacturers in the South West have seen a very strong start to the year as the economy has fully re-opened. However, companies are now facing eye watering increases in costs which are threatening to stop the economy in its tracks. As a result, the most immediate priority for the Chancellor in the short-term must be to use his Statement to do whatever it takes to support companies through this difficult period.
Matthew Sewell, head of manufacturing for BDO in the South West, said: “Regional manufacturers have recorded positive results across all performance indicators in Q1. UK-wide, however, we are seeing a worrying widening of the gap between supply and demand, and companies need to be prepared for the challenges ahead. Costs are rising at a speed that many manufacturers cannot respond quickly enough to and, combined with supply chain disruptions which will sadly now be exacerbated by the invasion of Ukraine, manufacturers will be looking for some support from the Chancellor next week.”
