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Manufacturing News, December 2020

MANUFACTURING

Input buying volumes in the manufacturing sector have reached their highest levels since March 2019 in the run-up to the end of the Brexit transition period, according to the latest PMI.

November saw rising levels of input purchasing and stockpiling, while export business rose as EU-based clients brought forward orders ahead of the 31 December deadline.

The IHS Markit/CIPS Manufacturing Purchasing Managers’ Index rose to a 35-month high of 55.6 in November, up on 53.7 in October and against the neutral 50 reading.

Increased production was linked to companies reopening after Covid closures earlier in the year but there was a marked divergence between sub-sectors, with intermediate and investment goods showing robust growth but consumer goods experiencing a continuing downturn.

Higher levels of buying increased pressure on already-strained supply chains, leading to raw material shortages and a deterioration in vendor performance. Longer lead times were also linked to the pandemic, restrictions including renewed lockdowns, transport disruptions and shipping delays.

Input cost inflation accelerated to a two-year high, with companies responding by raising average selling prices to the greatest extent in the year so far.

Job losses were recorded for the 10th consecutive month, linked to redundancies, cost reduction initiatives, staff restructuring and natural wastage.

Rob Dobson, director at IHS Markit, said: “Growth of the UK manufacturing sector picked up in November, temporarily boosted by Brexit buying among clients and the ongoing boost from economies reopening following lockdowns earlier in the year.

“The effects were strongest felt among firms supplying inputs to other companies as warehouses were restocked, and among producers of investment goods such as machinery and equipment.

The weak point was the consumer goods industry, which saw lower output and new order intakes amid depressed household sentiment caused by mounting job losses and the UK re-entering lockdown.”

Duncan Brock, group director at CIPS, said: “Panic buying aside, there was little in the figures to suggest a sustainable recovery once we move into 2021. Job shedding continued last month and new business could drop off a cliff in January as potential border disruptions are thrown into the mix.

“The prospect of an extended recession continues to hover above the UK economy until clarity around a Brexit deal is reached and hopes for an effective vaccine supply chain are realised, bringing much-needed normality.”

https://www.cips.org/supplymanagement/news/2020/december/factoryinputbuyingspikesasbrexitdeadlinenears/

A Midlands-based industrial collective is fighting back from Covid-19 disruption by winning more than £2m of new contracts.

The Manufacturing Assembly Network (MAN), which comprises nine sub-contract manufacturers and a specialist engineering design agency, has been able to use its expertise in tube manipulation, precision stampings and contract manufacturing to secure new clients in agriculture, horticulture, healthcare and furniture production.

Member company PP Control & Automation is leading the charge with over £1m of business, with the majority of that work focused on specialist controls and automation for companies supplying into the NHS.

Birmingham-based Brandauer has enjoyed similar success, securing a £500,000 extension to an existing deal with a Middle Eastern disposable razor manufacturer.  This was won against world class competition, beating a design and distribution model to produce new tooling and then delivering stainless steel razor blade substrates in volumes.

“Covid-19 has sent shockwaves throughout the global economy and many of our group have had to react quickly to adjust our operations to cope with sudden drops in volume, social distancing and the Government asking us to close,” said Tony Hague, CEO of PP Control & Automation (PP C&A).

“It is certainly on a par with the world-wide crash of 2009, if not a little bit tougher. However, like our sector has done on countless other occasions, we have pivoted and collectively attacked the challenges with tenacity and a desire to win different business using our core expertise.

“Four of the members have brought in over £2m of new contracts and others in our group have worked tirelessly to bring volumes back up to between 60 and 70% of preCovid activity.”

He continued: “There is also a concerted attempt to explore reshoring opportunities, especially with Brexit looming large on the horizon.

We believe there is a massive appetite for ‘localised’ supply and this could play into UK manufacturers hands if we’re prepared to collaborate and invest in the latest technology.”

James Lister and Sons’ tube manipulation business continued trading throughout the lockdown, supporting existing customers and winning many new clients as a result of competitive pricing and rapid response.

£100,000 investment in a state-of-the-art left hand/right hand CNC bending machine late last year has been pivotal and directly led to £150,000 of orders with firms involved in heat exchangers, structural design, rail, fitness products and furniture.

Austin Owens, founder of Grove Design, said: “When the crisis struck, we diverted a lot of our design expertise into supporting the development of the manKind visor and other products for the NHS.

“We then started to receive a significant number of opportunities from innovators and OEMs, with two of these resulting in over £200,000 of contracts to support the creation of new products for the agriculture and horticulture sectors.

“Design and the ability to solve problems will always be a unique selling point and something we are working with other MAN members to help support their recovery efforts.”

The MAN Group is made up of Alucast, Barkley Plastics, Brandauer, C-MAC SMT,

Grove Design, James Lister & Sons, KimberMills International, Muller Holdings, PP Control & Automation and Ricor, with Warwick Manufacturing Group (WMG) providing academic expertise, knowledge transfer and access to state-of-the-art technology.

Together, the collective offers a single-source solution to supply chain issues, providing access to castings, contract electronics, design, electrical assembly, forging, hydraulics, injection moulding, machining, PCB manufacture, pneumatics, high volume pressings/stampings and tube manipulation.

It employs over 2000 people across 21 factories, boasting nearly £150m of annual sales and export orders to more than 35 countries.

 https://www.thebusinessdesk.com/westmidlands/news/20458122mboostasindustrialgrouplookstorecoverfromcovid19disruption