Scottish manufacturers remain optimistic about future growth despite challenges

Published

5th February 2019

Over half (59%) of Scottish manufacturers remain optimistic about the future growth of their businesses but acknowledge that there are a number of challenges that lie ahead.

The results of the latest manufacturing and engineering survey conducted by Henderson Loggie, in conjunction with MHA and Bank of Scotland reveal that that 57% (up from 22% in 2017) of Scottish firms believe that the uncertainty over future trading tariffs could be a barrier to growth.

36% of Scottish manufacturers (49% UK) expect staff numbers to increase in the next 12 months, yet 55% (75% UK) of respondents report having difficulty recruiting employees with the relevant skills.

Commenting on the report, Gavin Black, Partner and Head of Manufacturing at Henderson Loggie, said:

“The survey shows an element of resilience amongst companies in the sector. The majority of respondents are forecasting growth in some form in the coming year which they predict will come from increased demand from customers, expansion of product offerings, new markets overseas and increased productivity through lean manufacturing practices. There is no doubt that conditions remain challenging, and firms will have to exercise rigour in their risk management processes to mitigate the effects of increases in costs of raw material and risks arising from the speed of technological change.

“Recruitment continues to be a concern, and for some companies this is exacerbated by the uncertainties surrounding Brexit which could create an even greater skills shortage than already exists. Although three out of five Scottish manufacturers asked predict growth in the coming year, there is less confidence than amongst their UK counterparts that staff numbers will increase accordingly to meet this growth.”

Craig Pollock, Area Director Manufacturing at Bank of Scotland, said:

“There is no doubt that during uncertainty businesses can lose a degree of confidence, however continuing to invest remains the key to growth whether that is focusing on having the latest technology, streamlining existing processes or getting in the right people.

“As the global market continues to evolve, Scottish companies need to ensure they remain well positioned to capitalise on future opportunities. Our recent commitment to lend £1.6bn to Scottish businesses this year is just one of the ways we’ll continue to be by the side of businesses.”

Henderson Loggie

Chartered Accountants, Tax and Business Advisors based in Aberdeen, Dundee, Edinburgh and Glasgow.

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