Small and medium-sized manufacturers are continuing to bounce back from the pandemic, despite experiencing significant supply chain and recruitment struggles, new research shows.
According to the latest Manufacturing Barometer, which surveyed more than 400 SMEs across the UK, nearly two thirds (64%) of companies are expecting to grow over the next six months and 52% plan to invest in capital equipment and manufacturing.
For the first time in over a year, the report also revealed that more firms are trading at increased levels than they were before Covid-19, highlighting the resurgence in fortunes since lockdown eased.
This encouraging data was set against a backdrop of disruption, with 60% of respondents stating that staff are having to spend additional time liaising with suppliers and, despite growing sales, just over half are being forced to increase product prices to recover some of their additional costs.
The manufacturing upturn slowed further at the start of the fourth quarter, as output growth was constrained by rising supply chain disruption, staff shortages and declining intakes of new export work.
The seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index® (PMI®) posted 57.8 in October, up from 57.1 in September, rising for the first time in five months.
West Midlands companies were able to secure more work in October, despite charging more for goods and services, which underpinned a further upturn in output.
The NatWest West Midlands PMI Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – was up from 56.3 in September to 56.9, signalling growth for the ninth month in a row and the strongest increase since July.
Capacity expansion efforts, strengthening demand, and rising customer numbers were among the reasons cited for higher business activity.