On Wednesday I was lucky enough to attend a breakfast meeting with the Chief Economist for the Manufacturers Association (EEF), Lee Hopley.
Given that Lee sits in Westminster advising government figures on trends in manufacturing I felt the below summary would be of benefit. I have worked with a number of building product manufacturers who rely on exporting as a significant vehicle for growth.
Her key observations are:
- Manufacturing in the UK has been a rocky ride (this, I know, is pointing out the obvious. I am setting the scene so bear with me).
- Optimism was raised in Q1 2016 but then Brexit hit our shores. With sterling, some 13% down on both the dollar and euro confidence has again dipped.
- Many manufacturers are conversely seeing this weakening as a great leveraging tool when exporting to mainland Europe and further afield.
- Innovation and diversification within UK manufacturers are better than we perceive. Likewise after sales (servicing and upselling) is often stronger than our foreign counterparts – we simply do not shout about it enough.
- For the next two years, manufacturing markets will continue on a recent trend of either emerging or mature markets growing independently, not concurrently.
- Growth within central Europe of 2% since 2007 is way down on expectation. This is likely to stabilise at around 1.5% this year. The slow growth can, in the main, be attributed to Italian and German banks reluctance to invest.
- Over recent years US manufacturing has dipped to around the same figure (against circa 3% historically). Export remains weak mainly due to the strength of the dollar and nervousness of consumers.
- Gone are the days of China’s 10-11% growth in manufacturing output. This is likely to stabilise at around 6% - a more manageable rate.
- In the main world trading agreements recently set out should be palatable; for example, South Korea and the US and steel importing from China to the UK.
- The government need and will look to help all manufacturers over the coming year. In recent years onus has been placed on helping emerging or SME businesses gain a foothold in foreign markets. Larger and established manufacturers need to hold their hands up for help.
So, all in all not the hideous, bleak picture certain commentators would have you believe. The above headlines also add weight to my own experience within the executive search sector, where currently the most popular role title we are working on is International Sales Director, and not just across building products; consumer products and medical device manufacturers are also seeing and acting on the international opportunities that exist for growth.
Click on the image below to be taken to a recent case study highlighting two appointments created to drive overseas growth: