Manufacturers must continue to look overseas for sales if they are to survive the current economic downturn, the Black Country Chamber of Commerce has said.
While manufacturing sales in the UK have been slowing for some time, many businesses in the area have maintained output and found success by selling their products in international markets, buoyed by the weakening pound and falling commodity prices.
Chamber president Peter Mathews has now urged the government to continue supporting these firms as a way of bolstering the UK economy.
“While we cannot ignore the serious difficulties many businesses are facing, there are still many local firms that are still positive about the economic outlook and it is these businesses that will enable the UK economy to come out of the downturn as quickly as possible,” he said.
He said the Chamber’s most recent Quarterly Economic Survey (Q3) had highlighted the importance of international trade. In this quarter, 71 per cent of Black Country manufacturers reported that export sales had remained constant or increased, with 57 per cent reporting that export orders had remained constant or increased.
Exporters have been helped by the falling pound and the expansion of European and Middle Eastern markets, as well as the recent downward trend in oil and commodity prices, which will ultimately lead to a reduction in raw material costs, he added.
Mr Mathews said generalisations about the manufacturing sector now needed to be avoided.
“This downturn was not caused by manufacturing, but by the finance sector, although it has now impacted on everyone,” he said.
“Of course, some manufacturing businesses are struggling and we must ensure those businesses receive proper support to withstand the economic decline. But others have been able to respond to the worsening economic climate and are confident about their prospects.
“Manufacturing is the backbone of the UK economy and the Black Country is a strong player within that, and I’m confident our work ethic and resourcefulness will give us a competitive edge,” he added.
Cash flow has been highlighted as an increasing concern throughout supply chains as credit becomes harder to come by and suppliers are forced to reduce credit terms to cover their own backs.
“Although the recapitalisation of banks and the recent interest rate reduction should avert a further credit squeeze over the next quarter, we will continue to urge the government to implement the measures to help businesses with their cash flow as a matter of urgency and ensure businesses are able to access a sensible level of credit to maintain solvency throughout the supply chain,” said Mr Mathews.