New figures released today from Creditsafe’s quarterly Watchdog Report show the UK’s manufacturing sector has witnessed 12.4% growth in sales year-on-year, increasing from £649bn in Q2 2017 to £730bn over the same period a year later.
Meanwhile, the number of company failures in the industry over the past year has fallen by 12.7%, dropping from 465 to 406 companies. The total number of employees belonging to the sector grew by 23.2% year-on-year, with an estimated 3.5m people now working within the industry. On another positive note, 6,279 new companies were created in Q2 2018, an increase of 27.2% when compared to the same quarter last year.
The level of bad debt owed by the sector, a key indicator that measures total monies owed to suppliers, has decreased from £40.3m to £32.2m since Q1 2018, a fall of 20.3%. Bad debt owing to companies operating within the manufacturing sector also decreased between quarters, dropping by one fifth from £14.8m to £11.6m.
Despite the largely positive sector figures, the changing retail market has had a damaging effect on the manufacturing industry. Notable failures from the last quarter include Jayroma, a family clothing manufacturer headed-up by former Conservative Party Chairman Lord Feldman, which filed for bankruptcy in May 2018 after 47 years of trading. Gibson Innovations, a division of the renowned Gibson Guitar brand aimed at manufacturing consumer electronics, also become insolvent.
The Watchdog report tracks quarterly economic developments across Manufacturing and 11 other sectors (Banking & Financial, Farming & Agriculture, Hospitality, IT, Construction, Professional Services, Retail, Sport & Entertainment, Transport, Utilities and Wholesale).
Chris Robertson, UK CEO at Creditsafe, commented: “It is promising to see that the manufacturing sector has, on the most part, enjoyed a solid year of growth to date, with many of the key indicators such as sales growth, number of employees and company failures all going in the right direction.
“Nevertheless, it’s important that the sector plans thoroughly for the next few years, avoiding any temptation of complacency. The ongoing political tensions over Brexit clearly demonstrate the lack of certainty surrounding the future of the UK’s core industries, not least manufacturing. It’s anyone’s guess what the UK’s manufacturing sector will look like this time next year, so it’s best to ensure thorough contingency plans are put in place.”