84% of manufacturers caught in ‘productivity puzzle’

The latest national survey of manufacturers by the Business Growth Service has found that over four out of five companies need to improve productivity and efficiency to meet growth forecasts in 2015.

The Manufacturing Barometer, compiled quarterly by the government-backed Business Growth Service, surveys more than 500 manufacturing SMEs across England.

The new release for January to March 2015 shows that, despite over half of respondents reporting a rise in sales during the last six months and nearly three quarters planning to expand sales in the next six months, 84 per cent feel that they must improve productivity by boosting efficiency, reducing waste and maximising output if their growth forecasts are to be met.  

Importantly, the vast majority (95 per cent) of respondents expect to maintain or increase their investment on machinery and new technology over the next six months, suggesting that manufacturers are increasingly looking to energy efficient technologies and processes to help achieve their growth plans. 

‘Desire to improve’

Steven Barr, head of manufacturing at the Business Growth Service, commented that the survey results highlight “the continuing challenge of productivity”.

“There has been significant talk about productivity and this latest report proves that it is still an issue for English manufacturers”, he said.

“When we asked the same question two quarters ago, 80 per cent felt their productivity needed to improve, yet just over half of those actually achieved their goal. This proves that there is plenty of room for improvement, but also shows a desire from our companies to not stand still…an important characteristic if industry in this country is going to build on the current period of growth.”

Nigel Jump, chief economist at consultancy firm, Strategic Economics, said: “With a modest, overall economic outlook, manufacturers are identifying a need to increase productivity but are not finding it easy to follow this through. Therein lies a key issue for UK manufacturers and the economy as a whole in the middle of 2015.”

Get support

Manufacturing SMEs seeking support to improve productivity can contact the Manufacturing Advisory Service (MAS), part of the Business Growth Service. 

SMEs based in Greater Manchester may also be eligible for fully funded resource efficiency support from the Business Growth Hub, which helps to boost productivity and increase profitability by reducing the use of energy, materials, water and waste in day-to-day operations. 

To download the full barometer report, click here.

Posted under Energy Efficiency, Fuel Efficiency, Material and Packaging Efficiency, Water Efficiency and Effluent Management and Other Manufacturing on 9 June 2015