Sharing the good news: export-driven growth is fuelling the UK manufacturing supply chain

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By Gordon Kirk, Event Director, Subcon

 

One of the most interesting aspects of Subcon is the pre-event research we commission. In association with The Engineer, we take the pulse of the UK engineering and manufacturing climate from the perspective of the contract and subcontract businesses that make up the supply chain throughout UK industry.

In line with other surveys such as the Markit / CPS PMI or EEF numbers, we found a lot to be encouraged by. Top of the list was a 48 per cent increase in UK engineering and manufacturing businesses seeing a growth in exports over the past 12 months with a further 35 per cent of businesses seeing export levels remain the same.

In terms of the size of that growth - amongst those increasing exports - the most common increase is a healthy 5-10 per cent, but for an elite fifth of businesses, exports grew by more than 20 per cent.

But what does this mean for the supply chain – do these headline figures of increased business reach the engineering workshops across the UK?

The good news is, yes they do seem to be making quite a strong, positive impact. Our research shows that two-thirds of manufacturing and engineering businesses used subcontractors in the past year, with 38 per cent planning to increase work with them in the next 12 months. However the spectre of Brexit uncertainty also looms large over these decisions and more than 4 in 10 (42 per cent) are unsure about bringing new subcontractors on board.

Again, to quantify this, more than a third (36 per cent) outsource £10,000-£100,000 worth of business, and a further quarter outsources £100,000 to £1m annually.

This is driven by a lack of in-house capacity and a desire amongst manufacturers and engineering businesses to focus on core competencies.

So the question becomes how can firms in the UK industrial supply chain deliver services and capabilities that will not only increase the amount of work that are awarded but also negotiate the choppy waters of the UK leaving the EU?

The answer to both – if the anecdotal evidence of Subcon is anything to go by – is investment. Nearly every exhibitor at Subcon is celebrating or marking a recent investment and they are all aimed at delivering new services to existing and new markets.

This makes it clear that the sector is taking its future into its own hands and pushing to make the most of new commercial opportunities. This is backed up by other parts of our research that showed the willingness to work with Government to overcome skill shortages. With such a strong commercial backdrop, we look forward to a vibrant, busy Subcon that sees business secured and companies grown.

To join us for the event and to join the conversation, please visit www.subconshow.co.uk

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