The land I call home was once at the forefront of the manufacturing world but over many years it has dwindled to just about 10% of our economy.
Even so, with the recovery still ongoing it’s looking like Britain is once again establishing itself as the place to get things made with even Europe’s largest manufacturer, Germany coming to us for orders.
Data has shown that manufacturers reporting domestic sales in Q2 is at the highest levels since records began in 1989.
One company who had an order book of 5-6 weeks just before the global crisis, now sees it at 5 years with turnover rising 30% in a year.
While exports are still woefully weak there are signs of a turnaround as manufacturing export order growth, as reported by Markit, has outpaced the global average for 15 months on the spin.
The British group for manufacturing, EEF, has seen that the global slowdown has spurred companies to look at new markets. At a time when exports to China ranked 11th on the list they now rank 7th and countries like Russia and India are looking to come into the top 10 (though they may need to revise their expectations for Russia somewhat
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One big boost to manufacturing is that business is returning home with 1/6 companies reporting that they’ve brought offshore production back in house to the UK and 1/6 have brought business back to other companies. Shipping costs, lead time issues and quality problems in China has seen an increase in enquiries at UK firms that haven’t been deterred by the slightly higher production costs.
“This isn’t just about recovery… this is actually new business that wasn’t made in the UK before, or not for a long time,” said Simon Howes of the Manufacturing Advisory Service
Reuters has the full story here
Before I get all misty eyed and stand up to sing the national anthem while wrapped in a Union Jack flag, the positivity in manufacturing isn’t one that spans the whole country. We do have some very good manufacturing and there are still some very big industry sectors like aerospace which make up a large chunk of business. These large companies are regionally based so there are still plenty of parts of the country that are not sharing this upbeat news. The strength of the pound is an issue, particularly when competing with the US and skilled workers are in short supply.
In the main though it is good news as positivity can snowball as confidence grows that little old British companies can compete on the global stage. Confidence breeds confidence and that opens up the doors to investment and job gains. Lack of offshore buyers remains the biggest issue, particularly with our biggest trading partner still wallowing in weakness.
Earlier on in the year I noted that businesses and entrepreneurs needed to tap into their great ability to seek out and develop other markets and that looks to be happening.
It’s another bullish sign for the UK, even if it ‘s only a small part of our make up. If we do manage to see exports take off then the economy could start to really fly and the pound with it.
I’m now going to take a 10 minute break to throw out everything with a “Made in China” stamp on it and replace them with “Made in Britain” goods.
God bless ya
