Experts say Midlands manufacturers must specialise to build on strengths to survive the economic downturn.
Production firms in the region should continue to focus on making value-added products for specialist or niche markets in order to build on the significant productivity gains achieved since the late 1990s, according to a report by PricewaterhouseCoopers.
The Future of Manufacturing reveals that while the UK’s production sector is suffering in the downturn, reports of the death of UK manufacturing are exaggerated. There is an opportunity for the sector to use the downturn to build on its strengths and there are positive signs that it is intent on doing so.
Chris Hibbs, partner and manufacturing sector expert at PwC in the Midlands, said: “Midland manufacturers are in a position of strength and while there are challenges ahead, there are also grounds for optimism.
“Over the past 30 years, manufacturing output has continued to grow steadily and reached an all-time high in 2007.
“Despite the rise of emerging economies, the UK’s manufacturing economy is still the sixth largest in the world and holds 15 per cent of the global market share in aerospace. This strong track record is largely due to the sector’s success in achieving a 50 per cent increase in labour productivity from 1997 to 2007.
“There are signs that manufacturers in the region are responding positively to the downturn and this is evident in the lengths that regional employers are going to minimise redundancies and retain vital knowledge and expertise. But they could still be doing more. There is also an important opportunity for Government to support employers in order to retain the talent that will be needed to sustain manufacturing.”
According to the report, there is a widespread misconception that the demise of the UK’s manufacturing sector is only a matter of time.
In fact, it continues to make a significant contribution to the economy, partly because it supports so many businesses in the services sector. Indeed, the distinction between ‘manufacturers’ and ‘service providers’ has become increasingly blurred, as products and services are increasingly bundled together to provide value-added solutions.