NI's manufacturers remain positive despite pressures

That’s one of the key findings in the latest survey test Manufacturing NI and Tughans produced by sector body Manufacturing NI in conjunction with law firm Tughans.

“The State of Northern Ireland Manufacturing 2018” finds a sector “demonstrating positive growth, sustained profits and increased staffing levels,” but says support for Brexit has fallen from just 21% a year ago to 6%.

Carried out in December 2018, the survey indicates that 67% of respondents (up from 56% in May 2018) consider the uncertainty of Brexit to be the biggest issue currently affecting business, out polling other issues such as the cost of doing business and local political uncertainty.

Against that background, 80% of those polled described their business as being in a position of growth whilst 57% said they expected that growth to continue in the next 12 months.

The same number reported an increase in staffing levels, up from 45% in May 2018, with 62% planning to take on more workers in the next year.

However, as the countdown to Brexit gathers pace, half believe it will have a negative impact on business.

Preparations are in evidence with 33% having conducted a Brexit risk assessment, 30% having put in contingency plans in place and 16% already stockpiling in anticipation of supply disruption. Another 42% plan to stockpile to ensure continuity of supply.

Other barriers to growth include problems recruiting the appropriate skills to meet orders, bureaucracy and government policy areas.

Over the coming year, firms plan ongoing investment with 72% intending to increase spend on sales and marketing; 71% aiming to upgrade or introduce new facilities and machinery and 61% focusing on R&D or product development.

“By nature, business will be positive, seek opportunity and plan for the future,” said MNI chief executive Stephen Kelly.

“The survey demonstrates this continues to be the case despite some dark economic clouds on the horizon.

“Firms want a business environment which allows them to succeed, to be agile and take action on areas which allow them to create more wealth and work.

“Sadly, in the face of spiralling input costs, particularly energy, recruitment difficulties and two years after the collapse of the NI Executive and the increasing prospects of a No Deal Brexit, firms are escalating plans to make investments elsewhere or plough cash into investments which protect rather than grow their businesses.”

Mr Kelly said it was “startling” that of the firms recruited in the past year, 80% struggled to get the skills they require for their business.

“This comes at a time when migrant labour is leaving, when a new migration policy restricts the ability to recruit and firms are being taxed for apprenticeships without the right to invest this money into developing their own people,” he said.

“Those who want Brexit to be a success need to start listening to these businesses or face the prospect of job losses in the mouth of May’s Council elections.”

James Donnelly, corporate partner at Tughans said: “The generally positive mood is encouraging despite the many real and potential challenges the sector is facing.

“With the majority of surveyed businesses actively recruiting, it remains a concern that 81% have found difficulty in recruiting the skills required and that 21% are turning down potential business opportunities as a result.”