Alastair Wilson, head of manufacturing at Tait Walker said
According to a recent survey by accountancy firm Tait Walker, manufacturing and engineering businesses in the North East are optimistic about growth.
Predictions for revenue growth in the coming year have dropped slightly, but the majority of businesses remain optimistic with 64% hoping to increase their headcount in the next 12 months, up on last year’s 57%.
Firms in the region are also looking to create opportunities for training, with 76% of businesses hoping to take on between one and six apprentices in the next 12 months.
Innovation is at the top of the growth agenda with 92% of North East manufacturing businesses currently investing in research and development (R&D) against just 82% nationally.
Tait Walker, as part of the MHA association, runs the manufacturing and engineering survey with Lloyds Bank Commercial Banking during the summer. The survey covers the UK and Scotland and this year received over 460 responses.
One North East business which has seen first-hand the benefits of investing in R&D is OpenWorks Engineering, which provides counter drone systems from its Stocksfield base.
OpenWorks Engineering’s Roland Wilkinson said: “Our sector is in its infancy and evolving at a rapid pace with companies proposing a variety of different concepts aimed at solving our customers’ security concerns. Being the first to deliver a brand new technology into this space provides OpenWorks Engineering with an enviable competitive advantage, one which we can sustain through continued innovation and technological development.
“R&D budgets can often be the first to fall when companies face financial pressures but often it is those who continue to invest that are able to turn short term challenges into longer term opportunities. This is of course particularly true in technologically rich industries such as ours, where OpenWorks Engineering would quickly fall behind our competitors were we to sacrifice R&D investment.”
Manufacturers are also looking outwards for growth opportunities with 58% of those surveyed currently exporting, many within new trade routes outside the EU such as South America, Asia and Africa.
Funding is still a barrier to growth, with only 16% having received external funding in the last 12 months to grow their business, and only 28% planning to apply for a grant.
Alastair Wilson, head of manufacturing at Tait Walker said: “In the last year the manufacturing and engineering sector in this region has rolled up its sleeves and moved forward despite the impact of Brexit.
“It is encouraging to see the growth predictions in terms of innovation, headcount and export activity so it’s clear that our manufacturing businesses are keen to continue growing.”
Richard McEvoy, area head for manufacturing in the North East at Lloyds Banking Group, said: “It’s positive to see that companies across the North East are confident about their future plans, despite some uncertainty in the wider UK economy.
“To expand successfully it’s vital that companies have the correct support. As part of our commitment to helping manufacturing firms across the UK to prosper, we have a team of specialist relationship managers who can provide the tailored guidance that businesses need to thrive.”