The Manufacturing Sector - an update

The challenges facing the UK manufacturing sector are many, varied and well documented; whether they arise from Brexit or the problems of Covid-19 and lockdown, the sector is currently experiencing uncertainties unseen for many years.

A recent survey found that output grew in August at its fastest rate since May 2014 indicating recovery following the coronavirus lockdown. This improvement was suggested to have been as a result of an upturn in domestic demand and also signs of recovering exports.

However, the sector is still well below its pre-coronavirus size and firms continue to lay off workers at a rapid rate as they adapt to the new economic situation.

Furthermore, the bounce-back is expected to slow over the Autumn as companies adjust to the new financial climate.

In light of this somewhat gloomy forecast, what should manufacturing companies be doing to strengthen their position?

1. Labour and the skills shortage – it is generally accepted that there is a skills shortage in the industry despite recent lay-offs. Companies need to plan their labour needs to identify areas of weakness and to develop strategies to recruit and train tomorrow’s workforce.
2. Temporary vs permanent staff – does the company rely on temporary staff to provide flexibility? If order levels are high, is there scope to move towards the employment of permanent staff which can prove more efficient? 
3. Technological change – without doubt, there has been a huge change in technology in recent years with digitalisation and robotics to the forefront. Companies that embrace these changes will be well placed as the economy recovers.
4. Strong management information – those companies that can access strong management information in respect of cashflow, inventory levels, customer demand and supply chain will again be well placed.

At Thomas Westcott and through our membership of the world-wide Prime Global group of accountancy practices we can offer clients in the manufacturing sector a broad array of experience and assistance including:

1. Design and implementation of accounting systems.

2. Preparation of management accounts.

3. Advice on all areas of taxation including VAT, Research and Development, capital allowances and tax-efficient remuneration strategies amongst others.

4. Human Resources

5. Health and Safety

6. Payroll services

7. Financial planning for key staff members through Thomas Westcott Chartered Financial Planners.

8. Financial accounting and audit services

9. Through Prime Global, access to experts in other countries.

For further information, please do not hesitate to contact me or your local Thomas Westcott office.