Sheffield City Region manufacturers must push on with ambitious growth
Following the latest Manufacturing Top 50 for the Sheffield City Region (SCR), it is encouraging to see so many companies engaged in advanced manufacturing and innovation. This is a key area which we must continue to push on with to achieve the ambitious growth plan set for the SCR. The data incorporates a wide range of manufacturing activities, including traditional engineering and manufacturing, as well as food and pet food manufacturing.
Digging a little deeper into the data reveals the following headlines:
- turnover of the Top 50 has decreased by 2.3% to £6.997bn from £7.157bn
- pre-tax profits have decreased by 41.0% to £141m from £239m
- employee numbers have increased by 1.2% to 38,805 from 38,347.
A key metric for the region is the profitability of the companies located here since this enables continual investment and growth for the local economy and brings employment opportunities to the area.
The numbers above initially suggest disappointing results, but further analysis shows this should not be the case as the majority of the fall in profitability is explained by the movement of two companies. £44m relates to an increase in the loss sustained by Tunstall Healthcare Group (due to restructuring costs and operational and market challenges). A further £49m is as a result of a reduction in the profits generated by Greencore subsidiaries located in SCR.
Despite the fall in profitability, companies in the region have continued to invest in people, as highlighted by the increase in employee numbers. This reflects a return of positivity to the economy with investment in people, plant and product development being back on the agenda.
What does the future hold for the sector? At the time of writing, a glimmer of negativity has returned with several challenges being thrown into the mix. This year has seen a significant drop in oil prices which has had an impact on those companies which form part of the supply chain to the oil and gas sector, of which there are many in SCR. More recently the slowdown in China is creating ripples across the world with uncertainty returning to the headlines. In addition to this, the impact of exchange rates is clearly affecting the export market. I am confident that the resilience our manufacturing companies demonstrated in the downturn will put them in good stead during what we all hope to be a brief storm.