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Mechanical engineering companies enjoyed a strong second quarter, building on the improvements in the first three months of the year

According to the Engineering and Machinery Alliance’s (EAMA) Business Monitor, two in five firms said order numbers were up and prospecting returns were also substantial with similar numbers reporting increased enquiries for UK business (39%) and for exports (32%).

Martin Walder, EAMA chairman: “The Monitor has been reporting this improving trend consistently since June last year.  Some other indicators such as employment have been continuously positive for much longer than that, albeit around half of all respondents have consistently said they plan no change.

“In Q2 two in five  (39%) planned to take on more employees up from a quarter in Q1 this year and pretty uniformly through preceding quarters going back some years.

“Subcontractors and other companies with very flexible manufacturing business structures, able and willing to respond to short term opportunities have been enjoying a big increase in demand, both from UK based businesses and from markets overseas, including China, India as well as closer to home base.

“These companies are also investing , upgrading operations to meet the increased demand and largely financing this out of own resources according to a recent BEIS small business survey, which shows only 18% of SME manufacturers accessing external funding in the last 12 months.

“Much of this is short term based business as weak sterling and the benefits of proximity to market and the ability to respond quickly to changes encourage OEMs and Tier 1s to bring some work back to the UK.  Meanwhile, many longer term plans have to await the outcome of the UK’s Brexit negotiations before they are likely to be realised.”