Welsh manufacturing industry in good health, says report

THE number of manufacturers in Wales has grown by 3.1% and business confidence remains high, according to a report.

Wales now boasts 5,680 manufacturing firms, with 156,000 people employed in the industry, which makes up 10.7% of the country’s total workforce

According to the report from manufacturers’ organisation EEF and accountancy and business advisory firm BDO LLP, this has been a robust increase in manufacturing jobs since March 2010, up 10.6% and the second highest in the UK

The country’s output balance has consistently outperformed the UK average since the second quarter of 2013.

The annual report – Regional Manufacturing Outlook – draws in survey data and the latest ONS figures to provide a longer-term and in-depth picture of the health of UK manufacturing.

Manufacturing now accounts for 16.8% of the country’s total output, the second-highest in the UK – with transport, food and drink, and metals the largest sectors.

Wales accounts for 4.2% of the UK’s manufactured exports – the smallest contribution by a single region. However, 66.9% of these exports are destined for the EU, and Europe overall accounts for 71.3% of the country’s overseas sales, both figures the highest proportions across the whole of the UK.

Despite an uncertain political landscape, manufacturers in the region still rank second-highest for confidence in the UK, maintaining the same position in positivity from last year. The confidence score has edged slightly upwards since the Brexit referendum.

Going forward, the aerospace sector is expected to have another strong year, also pushing through demand for metals, the country’s third-largest sector.

Paul Byard, director for Wales at EEF, says: “This is positive news for Wales, with our output balance outperforming the rest of the UK again. Confidence in the sector in Wales remains high, in spite of a squeeze on particularly domestic budgets, which was the likely cause of some signs of softening at the start of the year.

“Despite uncertain political times, investment intentions this quarter rose to their highest balance since the end of 2014, showing that firms are looking extremely healthy going forward.”

Paul Falvey, partner and head of manufacturing at BDO in Wales, says: “Wales has been a strong performer over the past year, outperforming other regions in manufacturing output and reporting high levels of confidence and investment intentions.

“However to ensure continued growth, we need the Government to deliver a long-term, practical industrial strategy for the UK and the regions – with a focus on the midmarket and investing in education, skills and in the Wales infrastructure. From better roads, rail links to reliable broadband connections and support for Industry 4.0, the Government needs to help create the right environment for Wales manufacturers to continue to be successful in what will undoubtedly be challenging times in the short and medium term.”