Despite the results showing an 11th consecutive quarter of growth, the increase of 0.5 per cent is still lower than not only the previous quarter (0.7 per cent) but also the forecasted growth of 0.6 per cent.
It is clear that the UK’s economic growth remains unbalanced. Despite pick up within the services and finance sectors, manufacturing has been declining for three quarters in a row, marking the seventh recession in the sector since 1997.
With Britain’s building sector shrinking by a whopping 2.2 per cent, the decrease in global demand alongside the strength of the Pound which has seen the cataclysmic crash of the steel sector, it seems without support, the sector is going to continue its downward spiral.
The need is simple; the government has to develop an industrial strategy to support this struggling sector and ensure that growth is balanced. The government shouldn’t stand by and let these strategic industries fail.
They need to pledge investment in innovation and skills to boost exportation, enhance manufacturing growth and improve productivity.
In addition, manufacturers themselves need to invest in their industry, specifically in innovation, training and product and process tools to support decision making and action taking.
Modern enterprise resource planning (ERP) platforms, for example, give organisations the ability to analyse business conditions and develop improved business plans, monitor and measure progress and provide the visibility into day-to-day operations.
Responsiveness and faster decision making could be key. This can include insight of capacity requirements planning, work order management, job costing, product data management and production planning and scheduling, which can all assist in helping manufacturers to ensure processes are streamlined and cost effective.
Planning and budgeting on an annual basis, especially considering the current state of the economy, is no longer possible.
Looking ahead to the fourth quarter, growth is expected to edge back up towards the 0.7 per cent mark but for this to happen, there is a clear need for improvement within the manufacturing sector as well as continued output from the services sector.
With the Autumn Statement due later this month, the support and investment proffered from the government will be key as well as the action taken from the sector itself.
While Britain may no longer be the “workshop of the world”, it is a vital sector for the UK economy and one that needs immediate action.
Organisations need to be resilient in times of trouble and ensure they are doing all they can to invest and innovate. Alongside support from the government, maybe the forecasted increase in UK GDP in the fourth quarter will come to fruition.
Steve Winder, regional vice president for Epicor Software, UK and Ireland