London and South East manufacturers' priority is to invest in people

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Investing in the skills of their workforce appears to be a main priority for London and the South East's small and medium sized manufacturers (SMEs).

The latest Manufacturing Barometer - produced exclusively for the Business Growth Service - reports that in London and the South East 73% of respondents are planning to increase spending on developing their people in a bid to unlock the 'productivity puzzle'. This figure is slightly higher than the national response of 71%

This outstrips the desire from companies to achieve productivity gains through increased investment in new capital and machinery (64%) or implementing computer software and systems (61%). Skills were a strong theme throughout this report, with 71% and 62% of manufacturers in the London and South East regions stating that the skills of their management teams and non-managers respectively supported their growth.

Stephen Peacock, Head of the Business Growth Service, said: "The race to improve productivity has been widely discussed over the past twelve months and the findings of the Manufacturing Barometer clearly show that the majority of smaller manufacturers are prepared to increase spending to gain better performance."

Kent-based manufacturer Met Erect Limited undertake the design, manufacture and installation of architectural metalwork and echoes the report's findings. MD, Paul Haynes explains: "Since 2008, we have steadily grown and this is down to our focus on quality standards and consistent investment in training and workshop facilities. The skills of our workforce have been vital to the company's growth and has enabled us to deliver high class standards and enjoy many ongoing contracts with long term customers. Met Erect has grown from strength to strength and I feel that the dedication of our highly skilled workforce has impacted tremendously to our success."

Stephen Peacock continues: "What is perhaps a little surprising is that increasing investment in skills is seen as a greater priority than capital and machinery. This shows the importance firms appear to be placing on ensuring they have the right people to grow their business and this spans from retaining key staff and employing apprentices, to continuously improving existing employees."

Oxfordshire-based SS Tube Technology design and manufacture bespoke, advanced tubular fabrications and thermal management systems for high tech industries and employs approximately 70 staff. It has doubled its turnover and staff in the last two years.

Daniel Chilcott, Managing Director says: "The skills of our workforce is vital to our company growth and we are now reaching the end of the third year of our apprentice programme which looks to develop our next generation specialist technicians and engineers. During 2015 we have also initiated a three month management development programme to nurture our leaders of tomorrow.

"To house future growth we are currently planning a new manufacturing facility for our growing, highly-skilled workforce with cutting edge manufacturing equipment to further differentiate us from the competition and give us room to far exceed our £12m near term target."

Stephen Peacock continued: "Our Business Growth Managers on the ground are also reporting a rise in the number of manufacturers requesting support for leadership and management training to help with strategy, succession planning and entering new markets. This is something we can provide funding for through the Business Growth Service."

Hampshire based manufacturer Anglepoise has been trading for over 80 years. Richard Sellwood, Managing Director says: "The skills of our workforce is vital to our company growth as we continue our plans to become 'world class' and 'globally significant'. Through our 'Great Place to Work' framework we create an environment in which people can do their best work. Our continued rapid growth and international expansion is a tribute to the people that work for our brand."

"We are growing in excess of 30% per year and by the end of this year we will be selling our products in over 60 countries. This success is being delivered by a really small team of 24 people and so investment in them is crucial to our long term future."

The Manufacturing Barometer is the largest survey of its kind, reflecting the views of 529 senior leaders running SME manufacturers across England, employing approximately 16,000 people.

The findings reinforce recent economic data highlighting a general softening in the marketplace, with indicators - including predicted sales turnover increases in the next six months - falling back to the same level seen two years ago.

Half of firms in London and the South East reported an increase in sales over the last six months, with 68% companies expecting to see an increase in their sales between now and the end of the year. The appetite for new machinery and premises fell by 5%, whilst spend on new technology is expected to increase by 44% in the next 6 months.

Stephen continued: "There is a lot of global uncertainty at the moment, with exchange rate fluctuations, the falling price of oil and China's economic performance posing significant questions over economic growth.

"This naturally cascades its way down the manufacturing supply chain and the smaller firms need to plan ahead to make sure they can cope with all scenarios, whether there is a general slowdown, delays on orders or sudden increases in volume as market confidence returns."

The Business Growth Service brings together GrowthAccelerator and the Manufacturing Advisory Service, with additional elements from the Intellectual Property Office (Intellectual Property Audits) and the Design Council (Design Mentoring).

It also refers SME manufacturers to the right support provided by other agencies, including UK Trade & Investment, Innovate UK (including High Value Manufacturing Catapults), the British Business Bank, local Growth Hubs and UK Export Finance.

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