Manufacturers have pledged to make major investments this year to help them meet expected new demands, a survey has found.
The Manufacturing Advisory Service’s (MAS) latest business barometer focused on SMEs to reveal that 84% of respondents are planning to plough cash into capital equipment over the next twelve months, with companies looking to spend an average of £134,000.
With almost 2,700 firms making up the North East SME manufacturing community, this could equate to hundreds of millions of pounds of fresh industry investment between now and 2015.
Nearly 50 SME manufacturers in the North East responded to the MAS Barometer, which provides an overview of economic conditions and issues faced by the sector during October to December 2013.
It found 60% plan to purchase new plant and machinery, 36% are focused on upgrading IT and communications infrastructure and 20% plan to improve premises for a variety of reasons including the development of new products and processes (36%), bolstering capacity (31%) and improving quality and efficiency (20%).
A fifth said they will approach banks to fund capital equipment purchases and 29% plan to secure money via grants and the Regional Growth Fund.
For the first time, more than half of those questioned also expect to take staff on over the next six months.
The survey found 60% of companies reported an increase in sales over the last six months, whilst 78% expect to boost sales between now and June.
Lorraine Holmes, area director for MAS, said: “There is a definite feel-good factor around North East manufacturing at the moment and these latest figures reinforce positive reports from the Society of Motor Manufacturers and Traders together with encouraging purchasing managers’ index data.
“Investment is crucial if we are going to take advantage of reshoring and predicted growth in markets such as offshore wind, renewables and low carbon vehicles.
“Importantly, nearly 10% of smaller businesses are looking to spend more than £500,000. This is a significant figure and proves that SMEs are prepared to invest ‘big’ in order to take advantage of opportunities.
“The fact that more companies are applying for grants and the Regional Growth Fund means awareness of available support is rising and I’m encouraged that some firms are also using their own in-house funds.” Business and Energy Minister Michael Fallon, added: “These figures point towards signs of a renaissance in manufacturing.”