Greater stability following the General Election is bringing improved confidence to the manufacturing sector, with the Bank of England’s decision to cut interest rates likely to prompt increased investment over the coming months.
That’s according to manufacturing sector advisor Ginni Cooper, who was commenting as new data showed the UK manufacturing industry saw its third consecutive month of growth in July.
The S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) rose to 52.1, its highest for two years.
Ginni, partner at national accountancy and advisory firm MHA, which has an office in Kendal said: “While the problems for the manufacturing industry are well documented, it seems as though we are turning a corner. Output and orders have both grown and, most significantly, there has been an increase in the workforce for the first time in almost two years.
“Following the Bank of England’s decision to cut interest rates to five per cent on Thursday, there is also likely to be further movement from the sector in terms of investment.
“However, the manufacturing industry is eagerly awaiting further announcements on the new government’s industrial strategy which is desperately required for growth and to encourage investment into the UK.
Ginni specialises in advising manufacturing companies across the North West. She highlighted three key long-term challenges for the sector which the government should prioritise solving: investment, skills and the UK’s relationship with the EU.
She said: “There is growing consensus that the National Wealth Fund could be the impetus that manufacturers need to start investing but that depends on the fine print, without this detail there is unlikely to be any movement.
“The shortage of skills has been a perennial Achilles heel for manufacturers for years. The Apprenticeship Levy that was introduced in 2017 has not had the desired impact. The problem has been exacerbated by preventing the freedom of movement of workers.
“Another key challenge is improving the trading relationship with the rest of Europe. Significant supply chain problems still remain post-Brexit and the ports are woefully underprepared for the new customs checks which were introduced earlier this year.”
