As the Tall Ships sailed into The Port of Blyth over the weekend (Friday 26 – Monday 29 August), many were reminded of our ship building heritage. Richard McEvoy, area director, Manufacturing, SME Banking at Lloyds Banking Group looks at how far our industrial, engineering and manufacturing sectors have evolved in the North East over the past decade.
The manufacturing sector currently employs approximately 125,000 people in the region, and is 16 per cent of regional output. This workforce contributes £6.4 billion to the national economy, reflecting its importance to the UK economy.
Indeed, manufacturing is now more important to the success and growth of the national economy than ever before, and what we are seeing on the ground is a strong pipeline of planned investment with no real evidence to suggest that implementation will be delayed despite Brexit.
We have seen a significant uplift of businesses benefiting from using hire purchase products this year to drive for greater productivity and efficiency gains. We believe this latent demand is, in the main, a result of underinvestment between 2008 and 2014.
For manufacturers with ambitions to increase sales and gain a larger market share, exporting in particular represents a significant opportunity.
It’s important that small and medium sized firms, some of whom may be first time exporters, seek advice about issues surrounding overseas trade, from compliance with foreign law to managing time and cultural differences.
The team of specialist manufacturing relationship managers at Lloyds Bank regularly work with businesses to identify ways to achieve export growth whilst navigating these challenges. Additionally, organisations such as UKTI and local chambers of commerce exist to support businesses on the export journey by offering guidance on how to access skills, insight and trading opportunities.
Taking advantage of these growth prospects that arise both domestically and overseas often relies on firms innovating and diversifying product lines and services. To do this, more manufacturers are considering adopting some degree of automation, if they haven’t already.
Investing in automation brings huge benefits in terms of efficiency and productivity, which in turn can encourage growth throughout all areas of a firm. Our experience of working with customers has shown that the growth generated by investing in robotics and automation can create opportunities for firms to expand their workforce rather than reducing it.
However, with a British Automation and Robot Association (BARA) study showing there are only 27 robotic units per 10,000 manufacturing employees within the UK, compared with 137 in Germany,113 in Italy and 59 in France, it’s clear that we still have a way to go to educate management teams as to the advantages of automation.
Looking ahead, the countdown has begun to September’s Durham Business Information Exchange (DBIE), and the event promises to offer a valuable insight into the industry’s current state, and its future prospects.
As sponsors of the DBIE, we’re looking forward to discussing how we can work with ambitious manufacturing firms, providing the support and guidance that can help the industry fly the flag for the North East on a global scale.