Member Article

North East manufacturers riding wave of optimism

• More than half of North East manufacturers planning to invest in next 12 months

• 86% say social distancing measures impacted their outputs – but 72% say they’ll be back to normal within a year

Optimism is ‘swelling’ among North East manufacturers with 72% confident it will take less than 12 months for operations to return to pre-Covid levels.

The figures – from a new survey released by MHA this week – suggest manufacturers are emerging from the worst effects of Brexit and the Covid-19 pandemic. MHA is a network of independent regional accountancy firms with more than 30 offices across the UK.

Almost three-quarters of the region’s manufacturers believe the Government ‘did enough’ to support manufacturers during the pandemic, while only 43% of businesses plan to invest less than they had originally planned over the next 12 months.

Alastair Wilson, partner and manufacturing specialist at MHA Tait Walker, which has six offices across the North East, says the Temperature Check survey provides a useful barometer of the state of mind of the region’s manufacturers.

He said: “These survey results give us encouraging news and would suggest that for the North East’s manufacturers, the impact of both the pandemic and Brexit are starting to ease. The figures also correlate with the recent national data from purchasing manager’s indices which have shown that the North East is not alone in seeing manufacturers gearing up for growth.

“The manufacturers in our region typically see the ongoing impact of the pandemic as a short to medium term issue and this ties to our conversations in the region where the manufacturing sector has on the whole had a relatively strong period in the autumn of 2020 and then the beginning of 2021.

“Investment programmes for plant and machinery which had been put on hold have started to be put back into action and confidence is recovering as the lockdown in early 2021 has come to an end.”

Wilson said at-work safety was now a paramount concern for manufacturer as the third national lockdown eased.

“Manufacturers led the ‘return to work’ and appear to be reaping the rewards, but now a key focus for many of our clients in the region now is ensuring that the measures that help to mitigate any residual risks from the pandemic are implemented quickly.

“As more of the manufacturing workforce is vaccinated, so more of the workforce are gaining confidence about returning to the workplace,” he added.

Wilson said manufacturers were also growing used to the administrative impacts of Brexit, with the disruption seen at the start of the year starting to subside.

Just over 70% of the North East survey respondents say Brexit generated additional paperwork for them, and some encountered obstacles such as a shortage of materials or logistical delays.

“Manufacturers in our region are continuing to have issues with Brexit but as the logistics and freight providers and customers have become more used to the impacts of Brexit, so we are seeing that the overall impact is starting to feel less burdensome,” Wilson said.

This was posted in Bdaily's Members' News section by Steve Maybury .