Brighter prospects pinpointed for Yorkshire’s manufacturers

The second quarter Manufacturing Outlook survey, which is published today by EEF, the manufacturers’ organisation, and accountants and business advisers BDO, indicates that some companies are still finding it hard to crack the export market.

According to the survey, both output and orders returned to “positive territory” in the last quarter, with firms reporting a balance of +18 per cent and +13 per cent respectively.

However, manufacturers in the region had been expecting an even better performance, with forecasts for the second quarter set at a balance of +42 per cent for output and +33 per cent for orders, according to the survey.

Yorkshire and Humber manufacturers appear confident that output and orders will continue to rise. There are also encouraging signs about companies’ investment plans.

Over the last quarter, the balance of companies in Yorkshire planning to boost capital expenditure increased to +18 per cent from +nine per cent in the first quarter of this year.

This bucks the national trend, which has seen a fall in investment intentions this quarter.

However, the balance of companies increasing headcount over the past three months has fallen from +eight per cent in the first quarter to + four per cent.

This is below the average reported nationally of +11 per cent in the second quarter.

Across the UK, the domestic market has improved, as companies report the first positive balance on UK sales since the second quarter of last year.

However, responses were weaker on export sales, and manufacturers are slightly less optimistic about a strong rebound in overseas sales than they were three months ago.

EEF Yorkshire region director Andy Tuscher said: “While the demand environment in major European markets remains weak, and some individual industrial sectors are facing their own specific challenges, the widespread improvement in our survey indicators is welcome news.

“However, a couple of aspects – namely the relative weakness in export orders – suggest that confidence may still be tempered for now.”

Jason Whitworth, a partner at BDO in Yorkshire, said: “Yorkshire firms have witnessed good growth in orders and output, alongside improved investment intentions in the last quarter, and they have a lot to be positive about.

“But the survey results also show that companies are less optimistic about export orders.

“It is not yet clear whether this is due to the difficulties in Europe or difficulties in establishing a sustainable presence in the fast growing emerging markets.

“Although entering into new international markets can be difficult, businesses shouldn’t give up.

“If they take all the right steps and are committed to expanding their non-domestic sales, businesses will reap the rewards in the long term.

“It is crucial for Government and lenders to get behind the numerous positive indicators emerging from the sector, and do all they can to help build the momentum of a recovery or risk seeing things stutter once more.”

In recent years, a number of long-established Yorkshire firms have responded to the challenging economic climate by expanding their operations into a wide range of sectors.

They include the Huddersfield-based JLB Group, which has its roots in the late Victorian textile trade.

Under the leadership of 
local entrepreneur and philanthropist Ian Brierley, the JLB Group of companies has grown to include a division which distributes and reconditions turbochargers, and a business which manufactures pipe cleaners and craft products.

The company has also retained a textile business, which sells and processes yarns. The combined turnover of the turbocharger, textiles and craft businesses is around £10.1m, and the group employs 67 staff.

Mr Brierley, the chief executive of JLB Group, said: “Huddersfield has been world renowned for its worsted industry. It’s still the best in the world.”

Although turnover in the textile operation has declined in recent years, the business has survived by being lean and efficient, Mr Brierley said.

He added: “We’ve been the only UK manufacturer of pipe cleaners for a very long time; it is a niche market.

“We’re certainly looking to expand our craft business, and, on the turbo chargers, we think there’s growth in that market.”

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