Growth predictions amongst Welsh manufacturing companies have fallen markedly since a year ago, according to the latest annual survey from leading professional advisers Broomfield & Alexander.
Only 66% of firms that responded anticipate growth of 10%+ over the next 12 months, compared with 90% in 2014.
The vast majority – 76% – also remain concerned about their ability to recruit suitably qualified staff, with 38% saying they would like to see an expansion of skills training in schools and colleges.
The picture of the health of small and medium sized manufacturers in Wales emerges in the research undertaken by MHA, the UK-wide group of accountancy and business advisory firms, of which Broomfield & Alexander is a member.
Companies in Wales responding to the survey covered a broad range of sizes and industry sectors including aerospace, automotive, construction, electrical and electronics, and oil and gas, with turnovers ranging from £1m to over £100m.
The survey, supported by the manufacturing team at Lloyds Bank Commercial Banking, also found that:
- 73% of manufacturing SMEs in Wales now export – with companies’ main competitors located in the UK and Europe, the focus is on areas where there is less competition
- 79% reported an intention to invest in R&D, and unlike elsewhere in the UK, take-up of R&D tax credits in Wales was good. 77% of those who claimed credits were successful
- 73% anticipated an increase in production costs over the next 12 months
- 63% have accessed government or grant funding in the last 12 months – including the Wales Economic Growth Fund, Smart Cymru and Jobs Growth Wales – and 57% said they were aware of the availability of Government grants should they wish to apply for them
- 60% said they thought staff numbers would rise in the coming year, with 57% expecting to take on between 1 and 6 apprentices or trainees – both figures slightly ahead of the UK average.
- 89% said they would vote to remain a member of the EU in the upcoming referendum, with the majority, 67%, believing that negotiated terms would best benefit business and the economy
Broomfield & Alexander managing director Ian Thomas said the survey lifted the lid on the challenges facing a sector whose struggle to grow was being hampered in no small measure by problems recruiting the skilled people they needed.
“While there are some hopeful signs for the future, such as the increase in STEM students at A Level and employers playing a more pro-active role in schools, signposting engineering as a ‘go to’ career in secondary schools just doesn’t appear to happen,”
“Improving careers advice and skills training within the education system needs to become a major focus of debate if Wales is to attract the next generation into manufacturing and engineering.”