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Ageing workforce problems
July 2020

SEMTA, the Sector Skills Council for science, engineering and manufacturing technologies, has recognised the challenges posed by, and felt by, an ageing industrial workforce.

SEMTA have been working in collaboration with the Department for Work and Pensions (DWP) to produce a booklet which will guide and advise manufacturing organisations on how to comply with age discrimination regulation as well as how to ensure an age diverse workforce that will nurture future growth.

The SEMTA publication is titled Age isn’t an issue encourages not only equality for job applications and opportunities within the workplace but also encourages employers to be even handed in the way they make vocational training, flexible working and continuous professional development available.

The full guide Age isn’t an issue is available at www.semta.org.uk

Given the widespread industry concern over a skills gap which could hamper the UKs competitive capabilities it is critically important that employers continue to develop the skills of the existing workforce and facilitate knowledge transfer when younger employees join their organisations. The food and drink industry is a prominent example of an industry sector which is currently relying on an ageing workforce to support future growth. This has meant that in addition to campaigns promoting industry as a career destination for bright young talent – through initiatives like McCain’s Potato Bus and the establishment of the Eden International Dairy Academy – it has been necessary to give attention to the constant upskilling of the workforce.

Older workers bring with them a wealth of knowledge, valuable skills, ideas and experiences. Companies are increasingly seeing the benefits of an age diverse workforce, and this can be encouraging for younger workers too, as they benefit from fellow colleagues expertise.

In collaboration with SEMTA the Department for Work and Pensions (DWP) have developed a tailored version of the Age isn’t an issue guide, specifically focusing on the challenges and opportunities faced by employers within the science, engineering and manufacturing technologies sectors. This comprehensive guide provides guidance on a range of workforce issues including recruitment, development, flexible working and retirement.

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PMI boost for manufacturing
May 2010

Increased exports have led manufacturing to its fastest growth in over 15 years, according to the latest CIPS/Markit Purchasing Managers’ Index (PMI).

The PMI surveys manufacturers on a number of conditions including orders, costs and inventory and produces a single figure indicator of how the industry is currently performing.

Where any number above 50 entails growth and any number below 50 means a retraction, the PMI was registered at 58 for April, up from 57.3 in March. That constitutes the biggest month-on-month increase since September 1994. Analysts had forecast a reading of 57.4.

New export orders grew at the fastest rate since 1996 and this has been attributed for the overall growth.

"Today’s PMI data join a host of recent surveys showing a solid, export led expansion of manufacturing activity in the UK in April, getting the second quarter off to a good start,” said EEF chief economist Lee Hopley. “Buoyant numbers from across Europe, the UK’s largest market, provide some confidence that together with a weaker exchange rate, the recovery across the sector is looking more sustainable. However, the outcome of the election and the market reaction to it remain the big unknown on the horizon."

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GE invests in UK
March 2010

General Electric has announced it will invest approximately £100m in offshore wind in the UK, including a new manufacturing facility.

The company is expecting to invest a total of €340m across Europe with the investment expected to create 1,900 jobs. The decision comes on the back of the government’s £60 million Budget pledge for ports servicing the burgeoning UK offshore sector.

GE UK managing director, Magued Eldaief, said: "We believe offshore wind has a bright future here in the UK and are delighted that the UK government yesterday committed to further developing this important sector. These GE investments will position us to help develop Europe's vast, untapped offshore wind resources."

RenewableUK, the country’s leading renewable energy trade association, today welcomed the announcement. “Towards the end of 2009 we have started seeing the first signs of a manufacturing rebirth around the UK’s offshore wind energy sector," says Dr Gordon Edge, RenewableUK director of economics and markets. "Now that all Round 3 sites have been taken up and the potential scale of offshore developments stands at over 40 gigawatts, there is a palpable sense of opportunity.

"RenewableUK has long maintained that strong and co-ordinated government support for the UK to become the leading global centre of expertise for offshore wind energy can result in thriving manufacturing clusters and 57,000 jobs by 2020," says Gordon.

"The fact that some of the world’s best known companies such as Mitsubishi and General Electric have now decided to invest in the UK and base their offshore operations here shows that such support pays dividends.”

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RBS/NatWest launch £1bn fund for UK manufacturing sector
February 2010

RBS and NatWest have pledged to make £1bn of new loans available on competitive, flexible terms to UK manufacturing businesses.

The bank has ring-fenced a fund specifically for the manufacturing sector, with loans being offered on competitive fixed rates and with the option to defer repayments for up to three years.

The bank is launching its dedicated manufacturing fund in response to feedback from customers in the sector who are anticipating growing demand for their products during 2010 and beyond. The fund will provide loans designed to help those businesses finance investment and ensure they are poised to take advantage of any opportunities that present themselves as the market for their products and services begins to recover.

Data published recently provide evidence for cautious optimism in a sector which, with nearly 168,000 manufacturing companies employing more than 2.5 million people, has a significant role to play in the UK economy. The Purchasing Managers’ Index (PMI) survey of UK manufacturers staged a solid rebound in December to reach a two-year high, suggesting an underlying improvement in the performance of British industry.

Peter Ibbetson, chairman of business banking at NatWest and RBS, said: "We’re beginning to see some encouraging signs for the manufacturing sector, but we can’t forget the context they must be taken in, which is that this sector has been hit particularly hard by the recession and its return to full health will not happen overnight. We want to ensure we are doing everything we can to assist the sector as conditions begin to improve.

“As we see many of our manufacturing customers turning their thoughts to investment in order to drive competitiveness, we want to send a clear message of support to them by creating a fund that is designed specifically to enable that investment. We believe the fixed rate deals we are launching today are better than you would find anywhere else in the market currently."

Alastair Murray, group finance director of Dairy Crest Group plc commented: "Anything that is designed to help UK manufacturers invest for growth should be welcomed. The fund should be seen as a positive initiative in this respect."

The manufacturing fund is the latest in a series of initiatives launched by RBS and NatWest in support of UK businesses, including an SME Customer Charter, a customer support helpline, and a price promise and committed overdrafts for SMEs. For further information, please visit www.rbs.co.uk/supportingukbusiness.

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Finance issues rise
January 2010

The number of UK manufacturers adjudged to be experiencing financial turmoil rose from 5,857 to 6,111 last quarter, although the number of firms with critical problems was down, according to insolvency experts Begbies Traynor.

Begbies Traynor’s Red Flag Alert monitors UK companies’ financial distress across all sectors. It rates firms with a court action of average, poor, very poor, insolvent or out of date accounts as having significant problems. Companies with critical problems are those with county court judgements totalling £5,000 or more or those who have been issued winding up orders.

While the number of manufacturers with significant problems rose by 5% from 5,615 to 5,885 – roughly in line with all companies, disregarding sector – those with critical issues fell to 226 from 242. And manufacturing firms collectively are more stable now than they were a year ago. There were 18% less manufacturers rated as critical in Q4 2009 than in the same period the year before and 16% less with problems rated as significant.

As a whole UK companies in financial turmoil rose by 6% last quarter to a total of over 140,000 firms. That figure is 14% down on the same period in 2008. There are 4,040 firms with critical financial problems and 137,487 with significant problems.

“Government support measures are providing welcome relief to the UK's struggling companies in the short term but they may exacerbate problems for some businesses as the need to repay debt catches up with them later in the year,” said Ric Traynor, executive chairman of Begbies Traynor Group.

“Experience of the last four recessions tells us that unemployment levels and corporate and personal insolvencies have lagged behind technical recession by one to two years. With tax and interest rates certain to rise, as well as increasing pressure on consumer spending, there is every reason to suggest that the insolvency peaks of this recession remain some way off.

“While business finance is expected to become more readily available during the first half of 2010, we anticipate a rise in the levels of financial distress during the second half of 2010, as temporary financial support measures are unwound.”

The worst region for businesses’ financial insecurity is Scotland, followed by the West Midlands.

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UK aerospace outsourcing
December 2009

2009 has seen an increase in the amount of new contracts for aircraft systems, components and equipment placed with companies based in low-wage economies.

Published by PMI Media Ltd, “The growth of aircraft manufacturing in low-wage economies 2005-2009” found that during 2009 an estimated $9,212m was spent with companies based in low wage economies of the world, representing 29.2% of the total market in new systems, components and equipment work — compared to the 6.2% share recorded in 2008. The majority of this work takes place in the airliner sector, which is responsible for approximately 73% of the value of the total aviation supply chain.

The study, which analyses the global aircraft systems, structures and equipment market between 2005 and 2009, suggests that North American and European manufacturers are retaining their technical and market dominance of supply chain integration, but are accelerating the outsourcing and relocation of labour-intensive operations to low-wage economies.

The survey includes a sector-by-sector analysis of the market for airliners, rotorcraft, business aircraft, fast jets and military transports — and a country-by-country analysis of aerospace manufacturing capabilities in low-wage economies. It lists all major aerospace manufacturing contract awards (2005-2009) for airliners, rotorcraft, business aircraft, fast jets and military transports, with details on values (where known), locations and technical/market implications.

Report author, Philip Butterworth-Hayes, said: “There has been a rapid rise in the number of new manufacturing plants in China, Mexico and Malaysia. These new plants — and other new manufacturing facilities in low-wage economies — accounted for over 30% of all systems, components and equipment contracts awarded on airliner programmes in 2009 and 27% of all rotorcraft business.”

“But the value of work won by companies in low-wage economies on European and North American aircraft programmes is worth approximately the same as the work won by Western suppliers on new aircraft programmes pioneered by companies in low-wage economies.”

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Manufacturing demand still depressed - growth expected
November 2009

Demand for UK manufactured goods remains very weak, but is less depressed than it has been for much of 2009, and over the next three months firms expect output to grow slightly, the CBI has said.

Responding to the CBI's latest monthly Industrial Trends Survey, 27% of manufacturers anticipate a higher volume of output over the next three months, while 23% said it would fall. The balance of +4% marks the second consecutive month where marginal output growth is expected.

A balance of 45% of firms said total order book levels were below normal, which was a slight improvement on October (-51%), and the least negative since December 2008 (-35%).

Export order book levels were weak, with a balance of 37% reporting them to be below normal. This slight improvement on October (-46%) may reflect greater interest in UK exports because of weakened Sterling.

Ian McCafferty, CBI chief economic adviser, said: "Manufacturers have had another testing month, though conditions are not quite as bleak as they have been for much of 2009. The weaker pound has softened the blow for exports, but the ongoing lack of demand for manufactured goods reconfirms that any recovery will be anaemic and slow. Expectations of marginal growth in output in the coming months are encouraging, but rising stock levels leave a question mark over the strength of demand."

Stock adequacy increased in November, with a balance of 20% of firms reporting levels more than sufficient to meet demand. This was largely due to higher stock levels among capital goods producers, who are the most pessimistic about output over the coming three months.

Manufacturers are also expecting domestic prices to fall very slightly over the next three months, and the balance of 7% expecting a fall is similar to October (-5%).

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Making gold out of green
November 2009

The UK needs to increase its efforts on low carbon industries in order to maximise its slice of a pie that will be worth £4.5tr by 2015, according to EEF, the manufacturers’ organisation.

The trade group has released a report today called ‘Under the Microscope – Is UK PLC ready for Low Carbon?’. It suggests the UK is in danger of falling behind other countries in the race to capitalize on green opportunities.

The report says UK manufacturers are not able to take advantage by developing green technologies as there are not suitable tax breaks for capital investment and R&D in place. The UK is also lacking the right policy toward obtaining the skills needed and our low carbon strategy is generally too vague, the organisation says.

Though the increased government focus on low carbon over the last two years is to be commended, “we cannot ignore the fact the UK is behind the curve and playing catch up in this area,” says EEF energy adviser Roger Salomone.

“Locating in the UK offers cleantech companies some real advantages, but major weaknesses remain. To position the country as a premier location for the low carbon industrial revolution we urgently need more strategic and joined up thinking from government together with active engagement from industry.”

The report suggests government:

  • focuses its efforts on the green industries that offer the biggest gains for the UK, with Nuclear power, carbon capture and storage, offshore renewables and low-carbon vehicles suggested;
  • brings R&D in clean energy up to average OECD levels (currently the UK spends the least);
  • introduces ‘green bonds’ which allow manufacturers to use future tax benefits to finance low-carbon technologies;
  • focuses on creating a strong supply of core skills and a genuinely demand-led vocational training system, rather than trying to second-guess future needs;
  • inspires young people to study for and pursue careers in the STEM professions.

EEF pointed to South Korea and in particular the city of Seoul as an example of a focus on low carbon that is better than ours. Seoul has committed to spending two per cent of GDP per year on developing green industries.

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UK food exports flourishing
October 2009

Exports of food and non-alcoholic drinks bucked the recessionary trend and were up 10.2% to £4.82bn in the first six months of the year, according to research for the Food and Drink Federation (FDF).

The food and drinks sector’s performance compares with a decline of 13.4% for all UK goods collectively.

If this performance is maintained through the second half of 2009, food and non-alcoholic drinks exports could reach £10bn for the first time. The sector is already on track for its fourth consecutive year of export growth.

The best export performers include breakfast cereals (up 12.5% to £207.3m); soft drinks (up 22.2% to £151.1m); and ice cream (up 55% to £43.4m). The biggest export market for the UK is Ireland, accounting for £1.27bn worth of orders. Europe collectively accounts for over 80 per cent of orders while the USA is the eighth biggest single market, buying £131m worth of British foodstuffs.

Melanie Leech is director general of the FDF applauded UK food manufacturers for continually looking to build their overseas sales and for succeeding where the majority of other sectors have failed.

However, “more could be done to help smaller companies maximise their potential in overseas markets, with issues such as a lack of insurance and longer credit terms creating real headaches for exporters,” she said.

“One way that the government could help is by extending its trade credit insurance scheme beyond the end of this year as a way of helping food companies access bank financing, which – because of the lack of insurance, has been reducing in recent months. We are also keen that the government considers backing an international trade credit insurance scheme to ensure UK exporters can compete on a level playing field, given many of their competitors are benefitting from state-provided insurance cover.”

The top 10 export markets for food and non-alcoholic drinks are:

1. Ireland (£1.27bn)

2. France (£618.7m)

3. Netherlands (£495.8m)

4. Germany (£330.1m)

5. Spain (£270.6m)

6. Italy (£238.8m)

7. Belgium (£185.4m)

8. United States (£131.1m)

9. Denmark (£83m)

10. Portugal (£81.3m)

The top five product sectors for exports of food and non-alcoholic drinks are:

1. Other prepared foods (including fats and oils, preserved fruit & veg, fruit juice, soups, sauces and     condiments, ice cream and vinegar (£1.22bn)

2. Cereals and bakery (£971.6m)

3. Meat and animal products (£632.9m)

4. Fish and seafood (£527.3m)

5. Dairy (£383.6m)

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European Commission approves GKN funding
September 2009

The UK government has been given the go-ahead by the European Union to inject £60m into a GKN research project aimed at the development of lighter aircraft wing components.

Whitehall needed approval from the European Commission to ensure anti state aid rules were not flouted. The body said the loan is allowed as it is for research and is repayable with interest owing.

By developing lighter wing components, GKN hope to enable aeroplanes to use less fuel and therefore cut their greenhouse gas emissions.

Meanwhile, ADS, the UK's aerospace, defence and security trade body, has condemned comments by Shadow Chancellor George Osborne alluding to possible defence spending cuts should his party prevail in the next General Election.

"Any future defence cuts would be very short-sighted,” said ADS spokesperson Matthew Knowles. “Cutting defence spending not only threatens to deprive our armed forces of the vital equipment that they need to protect us but it also threatens the UK's economic recovery.”

He pointed out that the defence industry employs 300,000 people and hosts 10% of UK manufacturing jobs.

"While other government departments' resources have increased, defence has seen its allocation fall from 4.4% of gross domestic product in 1989 to 2.3% in 2009,” continued Knowles. “Any future Government looking to make savings should look at other departments because defence has already made its contribution. The operational and industrial impacts of those savings are currently being felt and further cuts would put intolerable pressure on our troops and our high-tech manufacturing capabilities."

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Lord Mandelson introduces £151m package for advanced manufacturing
29 July

A significant package of measures to help UK manufacturers seize the opportunities provided by emerging technologies was launched today by Business Secretary Lord Mandelson.

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Fall in insolvency rate belies worse figures to come
29 July

A drop in the number of manufacturing insolvencies in England and Wales is masking a potential climb in the second half of 2009, says accountancy firm PriceWaterhouseCoopers.

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The business case for sustainability strengthens

Being green is good for manufacturers’ profits, claims a new report featuring case studies from European manufacturers Saint-Gobain, Volvo, Philips, Rhodia, Inditex, and others.

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