Manufacturing firms in 'sweet spot' - having got to grips with Protocol

A new survey conducted among local manufacturers shows that 67 per cent are experiencing growth/expansion so far this year - up from 59 per cent a year ago.
Gary McDonald Business Editor

MANUFACTURERS in the north "have got to grips with the Protocol" and, despite soaring energy prices and issues around recruiting staff, the sector is in "something of a sweet spot", one industry body head believes.

A survey of 130 Northern Ireland firms, conducted by Perceptive Insight for Manufacturing NI and Tughans, with the field work completed just two weeks ago, shows that 67 per cent are experiencing growth/expansion so far this year - up from 59 per cent a year ago - with just 11 per cent seeing their operations reducing.

And 74 per cent of businesses expect to see further growth in the next 12 months compared to just 19 per cent which fear they will contract.

“There's a resilience, an optimism and a renewed confidence in the sector right now, despite very difficult headwinds from rapidly rising input costs,” Manufacturing NI chief executive Stephen Kelly said.

Whereas past surveys have pointed to issues spawned by Brexit and Covid as main concerns for manufacturers, the most prevalent issues now are rising energy costs, cost of doing business, availability of raw materials and the recruitment of skilled workers.

“Manufacturers have generally got to grips with the problems around the Protocol and have made the appropriate changes to their future supply chain and procurement processes,” Mr Kelly added.

Virtually every respondent firm (98 per cent) has experienced an increase in energy costs in the last 12 months, while the cost of doing business - particularly expenditure on transportation - has affected 80 per cent of businesses.

Ninety eight per cent of manufacturers have faced growing costs of raw materials and 36 per cent of them believe their GB suppliers remain unprepared for the new requirements.

Disrupted supply chains are the biggest obstacle to the recovery of 14 per cent of the firms surveyed and 66 per cent say they require supply-chain support to mitigate the impacts of Brexit and Covid-19 as the economy reopens.

As a result of the recruitment crisis 58 per cent of firms are exploring automation and investment in technology to mitigate the effects of labour shortages.

“This survey shows that our manufacturers are positive problem solvers and increasingly picking up new business in markets at home, in the UK, EU and across the globe.

“It is a clear illustration of the determination of the sector to get through the turbulence, despite current minimum public assistance.

“Manufacturers are again leading the economic fightback and with the right environment are poised to ensure we recover our status as an industrial powerhouse”.

James Donnelly, head of corporate at Tughans, said: “Despite worsening trading conditions, many of our clients in the manufacturing sector are reporting strong growth in the last year.

“The changing conditions are seeing a greater appetite to adapt through investment in plant and automation, new energy systems and sourcing raw materials.”

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