According to the latest SME Manufacturing Barometer, published by the South West Manufacturing Advisory Service (SWMAS), just 30% of SMEs are planning to hire new staff over the short term.
This is the lowest figure since the barometer was first published 10 years ago.
While this underlines flat sales and profit predictions over the next six months, the report says this is balanced by manufacturer’s longer-term growth and investment intentions.
For example, figures show that 44% of SMEs increased investment in new premises and machinery over the past six months (last quarter: 37%).
Over the next three years, 56% of these companies anticipate investing more than they currently do in their business.
Simon Howes, MD of SWMAS, said that while this 10-year low in recruitment could raise some alarm bells, it is a reflection of the current labour market.
“The stories we hear of manufacturers unable to find the talent they need – as revealed in findings in another recent Barometer – prevail. This struggle to recruit is moving manufacturers into a new reality: They face the prospect of managing growth and meeting increasing customer demands with fewer people,” said Howes.
Dean Barnes, regional director of Economic Growth Solutions, publishing partner for the barometer, said: “The pragmatic investment strategy of the UK’s SME manufacturers implemented while they weather the Brexit storm does carry some risk.
“During this period, Brexit has stunted growth and seen customers pull up the proverbial drawbridge for some. However, some are also seeing new opportunities, taking advantage of this time to invest in new facilities and improve efficiencies. As a result, the sector is looking towards a horizon promising a potential leap in the health of their businesses once we know the direction Brexit will take and confidence returns to their customers and distributors.”
Based in Bridgwater, Somerset, SWMAS is a privately-funded organisation which looks to help manufacturers across the UK with planning and efficiency, including investment in both people and infrastructure.