What to expect from manufacturing in 2016

After a turbulent 2015 for the manufacturing sector, Nick Booth looks ahead at what manufacturers can expect in 2016.

In general, the figures do not look overly positive, with the sector growing at its slowest pace for three months in December 2015.

The Markit / CIPS UK Manufacturing PMI fell from 55.5 in October to 52.5 in November and 51.9 in December (a figure in excess of 50 indicating expansion).

Markit’s senior economist Rob Dobson noted that although there was improvement in the second and third quarters, manufacturing output over 2015 as a whole was below the level achieved in 2014.

A further note of caution has been sounded by the British Chamber of Commerce who suggest that the manufacturing sector is now “close to stagnation”.

There have been calls for the Government to assist in upgrading infrastructure, improving workers’ skills and enabling small firms to access cheap credit. The Bank of England has also been urged to keep interest rates low in an effort to protect small and medium sized businesses from higher borrowing costs.

These calls come in context of an impending EU referendum and volatile foreign markets, particularly in China and the introduction of the National Living Wage and further government spending cuts.

While this represents the general picture, the Engineering Employers’ Federation has identified reason for optimism in the form of the transport and pharmaceutical industries both of which are expected to grow in 2016.

Nick Booth, head of the manufacturing and engineering team at Harrison Drury, states: “We are aware of numerous manufacturers in the North West who are looking to expand in 2016, suggesting that while the general picture appears unsettled, we can expect to see some strong performances bucking the trend. While the manufacturing sector has had its troubles, it remains an integral facet of the North West’s economy and although some businesses will struggle, we do expect to see a healthy number of success stories in 2016.”

If you have any legal issues concerning your manufacturing business, do not hesitate to get in touch with a member of our team of manufacturing solicitors in Lancashire.

Nick Booth is the head of our specialist manufacturing and engineering team and can be contacted on 01772 258 321.