Last month the country dropped back into recession and, with the continuing crisis in the eurozone hitting markets, the economy does not seem in the rudest of health.

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But since gaining office in 2010 the proposed medicine diagnosed by the prime minister David Cameron and the coalition government has been to rebalance the economy towards exports and investment through a “crucial” manufacturing sector.

Initiatives have included the regional growth fund – which includes a £10m allocation to Norfolk car-maker Lotus, should the company’s ownership situation become resolved in favour of keeping production in this county.

Chancellor George Osborne has also outlined measures to boost exports among smaller firms in the recent budget.

And while the long-sought return to growth may still be some way off, Mr Cameron is likely to be pleased with the latest temperature reading – the Manufacturing Advisory Service (MAS) barometer, which is a cause for optimism.

The survey, published yesterday, suggests there are manufacturers in the East of England increasing sales, creating jobs and investing. It concludes that small and medium-sized manufacturing enterprises in the East of England are bucking sluggish growth forecasts with encouraging reports of increased sales and new jobs.

More than half (57pc) of East of England respondents to what is the first ever MAS national barometer said they had seen turnover rise in the last six months, with 60pc expecting further growth between now and the end of the year.

The MAS quarterly survey also revealed that 34pc of companies are planning to take on staff in the coming year with another 55pc expecting employee numbers to remain the same, as the level of new business inquiries holds strong despite difficult economic conditions.

It is the latest in a series of economic reports that underline manufacturing in England is one of the few sectors actually showing positive growth.

MAS is funded by the Department of Business, Innovation and Skills and aims to provide support for manufacturing businesses based in England to help them improve and grow.

The experiences of some businesses in Norfolk reflect the survey.

Rackheath-based Milltech Precision Engineering has recently installed £600,000 of new machinery to cope with rising demand.

Managing director Mike Ottolangui said that it had started to see growth on the manufacturing side of things since the beginning of last year.

“Just about everybody we deal with – customers, suppliers, competitors – have been very busy,” he said. “We are very upbeat. We have taken on additional labour and machines. Things are looking up.”

Milltech works with the energy industry among others and Mr Ottolangui said that remained a very buoyant industry.

“We were at Offshore Europe in September. The activity there was phenomenal. Everyone was looking for spare capacity,” he said.

But what is causing this?

“Over the last two or three years we have seen a lot of offshore work coming back to the UK because companies are finding they cannot get the quality they want,” said Mr Ottolangui.

“It is also down to the exchange rate, growing costs in China and costs of shipping. They [clients] do not want the amount of time in the water. A lot of people have brought work back in.”

Merit Plastic Mouldings (MPM), which employs 32 people at Diss, was one of the companies questioned and is also optimistic about its future.

The global manufacturer of precision injection mouldings and assemblies has seen strong growth in new products, especially in the medical sector.

Tom Palmer, managing director and also joint chairman of New Anglia’s Advanced Manufacturing and Engineering group, said: “The barometer reinforces what we are seeing in our own business and across other suppliers and partners.

“We are increasingly seeing work come back to the UK from abroad, as labour costs increase overseas and customers demand greater flexibility in the supply chain.

“This has already seen us win an order which is worth 10pc of our annual turnover and more is expected when you look at what we’ve got in the pipeline.”

He continued: “If the growth continues as we expect, we would certainly look at taking on some apprentices in the coming months.”

But both managing directors admit that their experience does not reflect all businesses in the manufacturing sector.

Mr Ottlangui said: “Of course, to some extent, it does depend on what industry you are in. For consumer products that may not be the case, but our area of activity is industry and equipment manufacturing and energy. That remains very buoyant as an industry.

“If you are in consumer products or related to public service in any way you have got severe problems – construction, infrastructure, housing,” he said.

Mr Palmer said: “It is all to do with individual businesses and what their target market is. I speak to some people and things are booming and others that are muddling on in quite an uncertain way. I’ve not got a feeling it is any particular market sector.”

But the growth comes with its own issues. Mr Palmer said that there was a lack of young engineers which was holding back the growth of a number of companies.

“But there is a huge range of initiatives,” he said.

But while things look buoyant now –could the recovery be set back by a Greek exit from the euro?

Mr Palmer said that there was concern and while Greece in itself was “small beer” there was concern about the impact it could have on the banking system which could have an impact on the cashflow of manufacturers.

But Martin Coats, MAS area director for the East, said that the MAS barometer was the “clearest indication” yet that manufacturers were enjoying increases in sales and, reassuringly, they expected this trend to continue.

He continued: “The barometer includes the views of manufacturers from all sectors and, against the backdrop of improvements in turnover, is showing a renewed commitment to create new jobs.

“It will be interesting to see if employers can find the skilled staff they require to fill the positions, bringing into focus the need for companies to create and support apprenticeships so we can start to fill the talent pipeline again.”

The report also revealed that 35pc of companies in the East of England are planning to increase spend on premises and machinery, while 25pc plan to invest in developing new technology which will help them to remain ahead of global competition and more than 79pc of firms admitted they would secure business growth through making improvements in operational efficiency.

Business minister Mark Prisk said that a key element of the government’s support for manufacturers was its investment in MAS.

He said it was offering real support to businesses to strengthen their operations and growth.

The manufacturing results are encouraging and show that many manufacturers are continuing to grow.

But there are still some struggling.

Mr Palmer said that the cut to corporation tax in the last budget was helpful, but that red tape must continue to be cut.

So if David Cameron wants the government’s manufacturing medicine to work for the economy he must do everything in his power to allow companies to continue to grow and continue to support the industry.

1 comment

  • "Tom Palmer, managing director and also joint chairman of New Anglia’s Advanced Manufacturing and Engineering group, said:......" When did this start up and who the hell is on it then ??

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    Wednesday, May 23, 2012

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