Manufacturing recruitment set to plummet

The number of British SME manufacturers planning to increase staff headcount in the coming months has plummeted to just 30%, its lowest level for a decade.

The findings, published in the national Manufacturing Barometer, show that 44% of SME manufacturers had increased their investments in new premises and machinery in the last six months, up on the previous quarter’s 37%.

While the number of manufacturers wanting to increase investment in their business will hold steady in the coming months, by this time next year half of all UK SME manufacturers want to have increased investment in machinery and premises.

In three years’ time, 56% anticipate investing more than they currently do in their businesses.

Simon Howes, MD of SWMAS, which published the findings in the latest Manufacturing Barometer with partner Economic Growth Solutions, said: “We are seeing a 10-year low in plans to recruit new staff, and while this initially raises some alarm bells, it must be read in conjunction with the investment manufacturers plan to make in machinery and premises.

“We found that some businesses have slowed recruitment, and this could be in line with worries that their customers have lost confidence given the uncertainty around Brexit.

“However, we really need to unpick this. 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.

“In this context their plans to focus on investment in new machinery, equipment, and premises ahead of creating new jobs, makes sense. If investment in automation and smarter equipment delivers more output with the same number of employees, a constrained labour market becomes less of an issue in the short to medium term.”

The Manufacturing Barometer shows that in 12 months from now the number of SME manufacturers expecting sales to increase climbs to 59%. A year after that, 73% anticipate sales increases.