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Report indicates that South West manufacturing industry recovery is in danger


A new report says that the South West manufacturing industry is expected to recover from a decline of output by the end of 2022, providing that supply chain disruptions and worker shortages do not add further disruptions. According to the report, conducted by manufacturers’ organisation Make UK and business advisory firm BDO, the region’s factories are seeing strong growth prospects as economies continue to open up and the recovery strengthens.

Having seen a 10 per cent decline in output in 2020, the sector in the UK overall is now set to recover a significant amount of that loss in 2021, with forecasts suggesting it will have recovered the total loss from last year by the end of 2022. However, Make UK has warned that supply chain disruption and some labour shortages could hamper these improvements in the final quarter of the year.

The organisation is now forecasting growth for the sector of +7 per cent in 2021, with a slight dip to +4 per cent in 2022. Should these be met it will ensure the sector has recovered all the lost output from 2020.

“South West companies are seeing buoyant growth conditions as prospects continue to accelerate for manufacturers with economies at home and abroad continuing to open up,” Jim Davison, region director in the South West for Make UK, said. “However, the slow recovery of the aviation sector, supply chain shortages and the rapidly escalating increase in shipping costs are threatening to put roadblocks on the road to faster growth despite the current optimism.”

“The substantially-improved levels of investment are a very positive sign and indicative of an industry that is confident of a future worth investing in,”Matthew Sewell, head of manufacturing in the South West for BDO, said. “Manufacturers have proved their resilience over and over again, but we know big challenges remain. Increasing costs, rising inflation and the ongoing battle to attract and retain skilled workers locally despite the positive recruitment intentions will continue to stress-test South West manufacturers for the remainder of the year.”

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