Alastair Wilson’s comments on MHA’s manufacturing temperature check results in the North East
The latest MHA Temperature Check, which has been completed by manufacturers in the North East would suggest that, like for society as a whole, the impact of both the pandemic and Brexit are starting to ease.
The manufacturers in our region typically see the ongoing impact of the pandemic as a short to medium term issue (typically not more than 24 months and more often less than 12 months) and this ties to our conversations in the region where the manufacturing sector has on the whole had a relatively strong period in the autumn of 2020 and then the beginning of 2021.
On the whole we are seeing manufacturing leading the return to work as the first mover across the North East’s business sectors and manufacturers are typically starting to encourage “finance and administrative” teams back to the office where they would have been working from home previously. A key focus for many of our clients in the region now is ensuring that the measures that help to mitigate any residual risks from the pandemic are implemented quickly.
This is typically a focus on rolling out workplace testing programs, additional safe working practices and a focus upon welfare and health and safety. As more of the manufacturing workforce is vaccinated, so more of the workforce are gaining confidence about returning to the workplace. For many of the businesses in the region the current focus is moving back more to “normal”, the product being made or sold has typically reverted back to the core business models pre pandemic and production staff have typically returned to full strength or close to full strength. Businesses are now starting to also implement lessons learned in the pandemic in terms of working practices, or moving forward with opportunities that have arisen such as acquisitions. Like prior versions of the Temperature Check, the businesses in our region generally regarded the support for the sector from the Government through the pandemic as having been sufficient.
Equally, as business returns to a more normalised manner of working, so we are also seeing sales teams from within manufacturing businesses moving back to being “on the road” rather than relying on Teams or Zoom and site visits becoming more frequent. Investment programs for plant and machinery which had been put on hold have started to be put back into action and confidence is recovering as the lockdown in early 2021 has come to an end.
Manufacturers in our region are continuing to have issues with Brexit but as the logistics and freight providers (and customers) have become more used to the impacts of Brexit, so we are seeing that the overall impact is starting to feel less burdensome. However the overall trend towards businesses making structural changes to supply chains to minimise the impact of duties and administrative changes is continuing and we are seeing clients changing supply routes to avoid customs borders where possible.
Some of these changes will involve goods which otherwise would have been routed through the UK in the past now being routed around the UK and so this will unfortunately have an impact on jobs and investment in some cases. The changes from Brexit for the sector may become more “permanent” over time as businesses continue to seek ways to change their trading models to reduce the burden of Brexit so that they remain competitive.
What did our clients say?
Most current problems are caused by Brexit, this could have been delayed. The lack of clear and concise guidance from government in all areas has been a major problem.
Extended transit times. Additional time required by our supplier to complete paperwork. Loss of services (For example direct shipping to customers from our factory.) Customers in ROI looking for alternative supply routes cutting out UK Complications of returning units to EU for repair.