MANUFACTURING SECTOR SHOWING SIGNS OF CONFIDENCE

The manufacturing sector is generally positive about the economy according to new research by accountants and business advisers BDO Stoy Hayward LLP, which looked at confidence levels in the sector over the next six months. In a survey covering Aerospace & Defence; Food Manufacturing and Distribution; Automotive; Engineering; and Technology, across the UK, 37.3 per cent of respondents were positive about confidence over the next six months, with only 14.7 per cent being negative. Forty-eight per cent of respondents said their confidence levels were unchanged from the beginning of the year. When asked if they expected a decrease in margins, results did vary according to geographic, sub-sector and size of company; Nearly 37 per cent of respondents expect margins to fall and 33 per cent expect them to stay the same over the next 6 months. Companies with turnover of less than £300m in the engineering, metal products and technology manufacturing were most downbeat, with nearly 48 per cent of engineering and nearly 46 per cent of manufacturing and technology companies expecting margins to slide. Smaller engineering and metals products companies in particular are gloomy in comparison to other sectors. Concerns about sales, cash flow abound For both larger businesses (turnover of more than £300m) and smaller businesses (turnover of less than £300m), the most pressing issues were cash flow and sales. Companies also voiced a number of other concerns, including: • Inability to insure debts • Increasing government red tape • Credit insurance on new foreign accounts • Avoiding breaching financial covenants set by our bank. • Strength/weakness of the GBP. The majority of goods are purchased in USD so the weakness of the pound has had a direct impact on our margins. Robin Lloyd, Head of Manufacturing at BDO Stoy Hayward in Southampton says, “The numbers overall are more positive than we were expecting, and there are indications that the sector is starting to improve, following an extremely difficult year. Manufacturers are having to work harder than ever to cope with the economic slowdown and issues such as falling sales and cash flow continue to weigh heavily on both large and small companies. It’s also interesting to note that a number of companies of all sizes cite government red tape as one of their biggest headaches.” Ends Word Count: 384 Notes to editors: For more information please contact Debbie Osborne at Logical Creative Marketing on 0845 345 6969 or email debbie@lcm.co.uk About BDO Stoy Hayward LLP: BDO Stoy Hayward LLP operates across the UK with over 3,000 partners and staff. BDO Stoy Hayward LLP is a UK limited liability partnership and the UK Member Firm of BDO International. BDO International is a world-wide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country. The Belfast Firm is operated by a separate Partnership. BDO Stoy Hayward LLP and BDO Stoy Hayward - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business. BDO Stoy Hayward is an award winning firm. Recent achievements include: • Best Workplace UK - Financial Times 2008 • 100 Best Companies to Work For - The Sunday Times 2008 • Audit Team of the Year – Accountancy Age Awards 2008 • Tax Team of the Year – Accountancy Age Awards 2008 • Corporate Finance Deal of the Year – Accountancy Age Awards 2008 • Employer of the Year – Accountancy Age Awards 2007 • The Women of Achievement Award – Women in the City 2008 • Top 50 Where Women Want to Work - The Times 2007 • Business Superbrand - Business Superbrands 2008