Confidence rising in Midland manufacturing sector, according to survey

The Midlands manufacturing sector is generally positive about the economy according to new research into confidence levels in the sector across the UK over the next six months.

In a survey of aerospace & defence, food manufacturing and distribution automotive, engineering and technology firms across the region 37 per cent of respondents were positive about confidence over the next six months, according to accountant BDO Stoy Hayward.

Only 17 per cent of respondents were negative about the next half-year, while 46 per cent of respondents said their confidence levels were unchanged from the beginning of the year.

When asked if they expected a decrease in margins, the Midlands sentiment echoed that of the overall UK with 35 per cent of respondents expecting margins to fall and 33 per cent expecting them to stay the same over the next six months.

Nationally, companies with turnover of less than £300 million in the engineering, metal products and technology manufacturing were most downbeat, with nearly 48 per cent of engineering and nearly 46 per cent of manufacturing and technology companies expecting their margins to slide.

Smaller engineering and metals products companies in particular were gloomy in comparison to other sectors.

Companies also voiced a number of other concerns about future trading conditions, including the inability to insure debts, increasing red tape, credit insurance on foreign accounts, avoiding breaching financial covenants and the strength of the pound.

Birmingham-based Tom Lawton, head of manufacturing at BDO Stoy Hayward said: “The numbers overall are more positive than we were expecting, and there are indications that the sector is starting to improve, following an extremely difficult year.

“Manufacturers are having to work harder than ever to cope with the economic slowdown and issues such as falling sales and cash flow continue to weigh heavily on both large and small companies.

“It’s also interesting to note that a number of companies of all sizes cite government red tape as one of their biggest headaches.”