2019 Trend Analysis for Manufacturing
Here are the global views on 2019 filed accounts to date – giving an early indication of business behaviour over the last year. The comparative numbers for 2016, 2017 and 2018 are taken only from the companies who filled in 2019 for comparison purposes.
An early indication from the data is that businesses will see revenue growth but that margins will most likely continue to be squeezed, reducing all profitability measures. An interesting trend in the data shows that investment in employees has increased, suggesting businesses know they have been under increasing pressure over the last few years and need to act. Interestingly when looking at the client survey data just under half of businesses plan to take on new staff (48%) with 22% seeing recruiting skilled staff as a barrier to growth. For those who aren’t recruiting 55% plan to invest in training current staff.
We are seeing continued limited investment in assets, increasing revenue per pound of asset even more. Inventory measures suggests the level of stock being held is continuing to increase.
Debtors days are still being well managed, although the reduction in working capital, and increase in creditors, suggests businesses are using suppliers to fund some of the investment in stock levels. Cash protection continues with an increase in the cash to borrowing ratio.
Case study: Playdale
This North West company designs and manufactures outdoor playground equipment, exporting to just under 50 countries with plans to grow. Established for over 40 years, over the last 10 years, Playdale has increased its exports to 50% of its total output, accounting for a quarter of its turnover. It plans to further increase export sales by improving service and speed of business through general digitisation across the business, including design, sales and production. They have also recently invested in specialised digital equipment, and have successfully made R&D claims. The forward-thinking managing director, Professor Barry Leahey MBE, who featured in ‘The Manufacturer Top 100 People in Manufacturing’ in 2018, says their team, who are highly skilled and experienced, are key to the success of their business, and they are planning to hire further specialised staff.
Thoughts from the experts
Playdale’s experience is an example of how a well-run company can prosper when it invests in its people, even in a challenging global environment for manufacturing. The signs are that 2020 will see some of these pressures ease, which will hopefully create even more opportunities.
This article comes from our latest Manufacturing & Engineering Survey Report, now in its eighth year, is a go-to report when it comes to understanding the sector, its opportunities and challenges. We benchmark SMEs across the UK to paint a national picture of the Manufacturing and Engineering sector.
Click here to read a copy of the full report.