GrowinG pains results from the Carpenter Box sME Manufacturing survey - 93% of sME manufacturers in the south have a growth strategy, but skills shortage highlighted as ‘a national scandal’ The results from the latest annual SME Manufacturing Survey from West Sussex-based chartered accountants and tax advisers, Carpenter Box LLP, in conjunction with MHA, the UK-wide group of accountancy and business advisory firms, paints a picture of growing optimism among manufacturers on the South Coast and in the Gatwick Diamond. This optimism is supported by continuing investment in R&D and capital expenditure and an increase in recruitment, including a 13% rise in the number of businesses due to take on apprentices. That said, a shortage of recruits at every level, is harming future prospects and has been described by Chris Coopey, Head of the Manufacturing Sector at Carpenter Box and Head of the Manufacturing Group at MHA, as “a national scandal.” Interestingly, despite nine in every 10 small and mediumsized manufacturers in the south predicting growth in 2014, more than half of these businesses still feel unable to pass on any increased costs to customers. The Survey also highlights that 36% of the same businesses are unsure how they will meet the upcoming cost of pension auto-enrolment. Unsurprisingly, given the level of administration involved in auto-enrolment, almost six in 10 also say that ‘red-tape’ is getting worse, despite government pledges to reduce regulation. Energy costs also remain a major issue.
30│ Issue 3 � 2014
Survey highlights: • Optimism among manufacturers in the south is high, with 93% predicting growth over the next 12 months – almost half of these anticipate an increase of over 10%. • Almost six in 10 companies feel unable to pass on cost increases to customers, reflecting a cautious approach to economic recovery and continuing concern over pricing. • 83% expect to see an increase in staff numbers in 2014 and 62% of companies intend to take on apprentices or trainees. However, there are calls for an ‘Industry to Education’ interface to address the predicted shortage of engineering graduates.
“We need to get to grips once and for all with signposting our young people to consider a career in engineering and manufacturing.”
• 85% of companies intend to invest in R&D this year. Of those who applied for the R&D Tax Credit Scheme in the last 12 months, no respondents reported an unsuccessful outcome to their claim. • 71% of respondents on the South Coast and Gatwick Diamond currently export, with assistance received predominantly from UKTI and Sussex Enterprise. • Africa is growing in popularity as a destination for export and trade, increasing from 23% last year to 33% in 2014, but there are worries over sourcing local distributors and managing the regulatory and tax environment. • 36% of respondents are concerned about meeting the future cost of pension auto-enrolment and its impact on their competitiveness. - Business|Survey -
Chris Coopey, Partner at Carpenter Box LLP