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UK sales grow as manufacturers savour recovery

Manufacturing firms in the county had been experiencing a contraction in national sales and orders since the first quarter of 2014.

But the QES for Q3 2015 reveals the percentage of businesses reporting increases nearly doubled in the three months to September, influencing business confidence, training investment and recruitment.

While businesses operating across the services sector saw UK sales activity remain broadly in line with the previous quarter, manufacturing companies reported a significant increase in UK sales over the same time period from 26% in the prior quarter to 43% in Q3.

In contrast to exporting, manufacturing firms in Northamptonshire have reported consistently strong sales performance with comparable figures to the second quarter; 79% of manufacturers stated that export sales had remained the same or increased compared to 82% during Q2.

Encouragingly, the third quarter saw export sales for services sector firms exit contraction territory with 74% stating that export sales had either increased or remained consistent with Q2.

The QES, an independent business survey contains responses from local businesses employing 5,590 people from across Northamptonshire.

In terms of recruitment, businesses across both the services and manufacturing sectors have attempted to hire staff.

There was a 30% increase in the number of manufacturing firms trying to employ staff making a total at 78%, whilst 56% of service sector respondents attempted to recruit, a rise of 14% on Q2. 

Consequently, a third of businesses operating in both service and manufacturing sectors stated they had increased their workforce. This is likely to be the result of increased sales and order activity across the county.

The third quarter also saw manufacturing businesses reporting a sharp increase in training investment with 95% citing investment either remaining consistent with the prior quarter or increasing.

Likewise, 89% of service sector firms’ reported investment in this area being broadly in line with the previous quarter.

As a result, there has been a noticeable rise in business confidence in the third quarter by manufacturers with 92% of manufacturing firms citing their turnover had either increased or remained the same, compared with 85% in the Q2.

Meanwhile 93% of service sector firms reported that turnover had increased or was consistent with the previous quarter.

Overheads were the main pressure on prices for businesses in both sectors. Pay settlements were the second most influential factor overall, closely followed by raw material costs for manufacturers, and pay settlements for the services sector.

Chamber chief executive Paul Griffiths said: “The results from the QES for Q3 2015 show that while the manufacturing sector in Northamptonshire has performed disappointingly in domestic sales in recent quarters, it is a reflection of the national trend highlighted by our partners at The British Chambers of Commerce.

“We are pleased to see our local manufacturers recording an improvement in their domestic balances for sales and orders for the first time since Q1 2014, albeit at a weaker pace than the service sector.

“Northamptonshire has a buoyant service sector and the county’s manufacturing remains a vital sector for productivity and exports. We will continue to monitor the manufacturing sector through the QES. The government must make every effort to encourage manufacturers to explore global markets." 

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