Manufacturers exporting to tackle slowdown

Small manufacturers may finally be poised to turn to exporting to exploit a slowdown in domestic orders.

Following last week’s gloomy exporting figures, which showed the UK’s trade deficit has hit a record high, 71pc of small manufacturers questioned by the Manufacturing Advisory Service said they are looking to boost their revenues through more overseas sales over the next 18 months, reports The Telegraph.

In line with a number of recent surveys which have suggested a weakening of confidence among small manufacturers, only 40pc of the 700 companies said they had seen an increase in inquiries for future orders, down from 49pc three months ago.

The number of companies considering investment in new machinery and premises over the next six months also fell, from 44pc to 38pc, according to MAS, which is publicly funded.

David Caddle, MAS area director, said: “There are indications among [small] manufacturers of a more cautious outlook. This is not unexpected when you consider the recent economic forecasts and, historically, it takes a little longer for the slowdown to cascade its way down the supply chain and to the smaller companies.”

However, Mr Caddle said: “We have to make sure we don’t talk ourselves into another downturn.

“The majority are saying to us they are growing and expect this to continue over the next six months.”

Precision component manufacturer Brandauer was one of the firms questioned. Its sales director, Rowan Crozier, said 2012 has been “quite static so far”.

He said: “We are definitely seeing softening in certain sectors, as the [large manufacturers] destock and put investment plans on hold.”

However, he said he expected “significant growth” from the environmental and automotive electronic sectors. The company has not yet felt the impact of the eurozone crisis, he added.

“Nearly 80pc of our turnover is export and the majority is for China and the US,” he said. “English manufacturers will have to broaden their horizons; there’s a whole new world of potential clients out there in countries outside our traditional markets.”