Is small business manufacturing in the UK rebounding?
The strength of national economies ebbs and flows, as it always has, and governments constantly pore over statistics to see if market conditions are improving for their business sectors. Global factors are an important part of how manufacturers in the UK fare, and the recent dumping of cheap steel by China has led to serious problems for the UK steel industry.
However, in terms of other manufacturing areas there are encouraging signs that export and domestic orders are picking up, according to recent research. There have always been difficulties, especially for exporters, when sterling is strong but over the past few months it has weakened, especially against the euro. Whereas a few months ago the pound was at around €1.42, in February 2016 it had fallen to around €1.32, a significant difference when trading in the Eurozone.
Since October 2015 UK manufacturers have seen a recovery in new orders and output, and business appears to be on the way to shrugging off the effects of the recession. Small businesses form the bedrock of UK industry, and though you constantly hear about the vast conglomerates such as BP and Shell, and the tax-averse companies such as Google, Starbucks and Amazon, it’s the small businesses that help drive an economy’s recovery.
Outsourcing manufacturing operations has been popular for businesses for a long time as they seek to drive down costs. You could be forgiven for thinking that everything you buy has been “Made in China”, and that’s not unreasonable, but many operations in the UK are now bringing manufacturing back onshore.
One of the reasons for this is that UK manufacturers have the opportunity to find niche markets as well as larger ones that respect the fact that products have been made in the place of origin. The UK was built on quality manufacturing and the status of “Made in the UK” still carries a lot of weight around the world. It puts out that all-important message that a buyer can expect high quality and consumers will buy into a particular brand and remain loyal to it.
Pet healthcare company Bob Martin is a case in point. Founded in 1892 the company is based in the UK with a number of manufacturing sites across the country and sells in Europe as well as worldwide. Amongst its UK manufactured products are shampoos, de-wormers and flea tablets for dogs. You can find many other pet care products from them, all made in the UK.
The changing thinking about outsourcing
Companies outsource to cut costs but many are now either bringing more work back to the UK or seriously considering it. One reason is concern for the environmental consequences of outsourcing, especially in terms of shipping and then onward transport.
Although the UK economy is still creeping back after the recessional disaster caused by the banking collapse almost a decade ago, it’s in far better shape in terms of manufacturing than it has been for some time. Businesses will continue to work and expand and bring their operations onshore.