Greater stability following the recent general election is helping to boost confidence within the manufacturing sector, according to Ginni Cooper, a partner at the accountancy and advisory firm MHA, which has an office in Kendal. This outlook follows the latest data showing that the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) reached a two-year high of 52.1, suggesting a more positive trend for the industry.
Cooper noted that the Bank of England’s decision to reduce interest rates, alongside the promising PMI figures, signals a potentially brighter future for the sector. She emphasised the significance of the manufacturing workforce’s growth, marking the first increase in nearly two years, and expressed hope that the rate cut to 5% would lead to enhanced investment in the sector.
While acknowledging the well-documented challenges facing manufacturing, Cooper suggested that the sector might be starting to recover. She pointed out that both output and orders have seen growth, with the workforce expansion being particularly noteworthy. She anticipates further developments in sector investment, following the Bank of England’s recent interest rate cut.
Cooper also stressed the importance of the new government’s forthcoming industrial strategy, which is crucial for sector growth and attracting investment into the UK. She mentioned the National Wealth Fund as a potential catalyst for manufacturers to begin investing, though the specifics would be critical.
The ongoing skills shortage remains a significant issue for manufacturers, a problem that has persisted for years. The Apprenticeship Levy, introduced in 2017, has failed to deliver the expected results, and the restriction on the free movement of workers has only worsened the situation. Cooper also highlighted the ongoing challenges in improving trade relations with Europe, with significant post-Brexit supply chain issues still unresolved.
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