The survey, supported by Lloyds Bank Commercial Banking, sampled 400 predominantly SME manufacturing and engineering businesses and found that recruitment issues were acting as a significant barrier to expansion for 28% of companies.
Asked what should be top of the government’s to do list, a quarter of respondents said they wanted more emphasis on skills training in schools and colleges to help develop the next generation of engineers and technicians.
The report also identified that concerns over the ‘skills gap’ have had a knock-on effect on the sector’s optimism, with confidence about future prospects declining among 16% of respondents when compared to last year’s results.
On top of this, nine in 10 companies said their production costs would rise in 2015 for the fourth year in a row, primarily through higher wages. MHA said: “It seems with over 70% feeling unable to increase prices to customers, productivity gains are becoming ever-more important.”
Meanwhile, the burden of red tape continues to be an issue for manufacturers, with 98% stating it was a concern for their business and more than half of these (55%) feeling that the burden of regulation was increasing.
Chris Coopey (pictured), head of manufacturing at MHA, said: “The survey provides a valuable insight into the challenges facing a sector with considerable growth potential but one also struggling to recruit the skilled people needed to help deliver plans for growth.”
He added: “While there are some hopeful signs for the future, such as the increase in STEM students at A level and employers playing a more pro-active role in schools, signposting engineering as a ‘go to’ career in secondary schools just doesn’t appear to happen, so improving careers advice and skills training within the education system needs to become a major focus of debate if we are to attract the next generation into manufacturing and engineering.”
David Atkinson, head of manufacturing, SME, at Lloyds Bank Commercial Banking, said: “The news that we are facing a significant skills shortage is no surprise, but it should be alarming that the issue is now reigning in the ambitions of management teams across the sector. Without a solution the UK’s manufacturing and engineering industry will not be able to fulfil its potential and we will see the UK economy continue to be dominated by the services sector.”
He added: “However, the answer does not just lie with the government. We must all help to tackle the issue and one of the primary reasons we have partnered with the Lloyds Bank Advanced Manufacturing Training Centre is to address the skills gap. Due to open later this year at the Manufacturing Technology Centre, the centre will develop more than 1,000 new engineering apprentices and trainees, ensuring that there is an influx of skilled workers into the manufacturing industry over the coming years.”
To obtain a copy of the full survey, please contact Hannah Farmborough on 0207 429 4147, e-mail: Hannah.farmborough@mhllp.co.uk
For more information about MHA, visit www.mha-uk.com