According to recent figures put out by the EEF, the electronics sector has seen weaker orders intake over the past three months, with associated concerns about output expansion for the next three months. Companies are indeed tightening the belt due to growing challenges in the global economic environment (the cost of gold has increased dramatically) and are taking their time to make investment and recruitment decisions. However, whereas big and medium size companies are better placed to offset losses, the case is slightly different for single-sited UK SMEs, where the loss of an important customer could be business-critical. The relatively short-term nature of SMEs’ order books in the electronics sector is certainly eroding confidence for some businesses. The UK government should acknowledge that and support smaller manufacturing companies, and allow them to thrive as in Germany where SMEs have been the catalyst for economic growth.

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Technorati Tags: DSEi, electronics, manufacturing, SMEs

The recent story of Bombardier losing out on the Thameslink train contract to Siemens has triggered talks over whether the UK should act like other European countries and factor ‘socio-economic’ rationales in public procurement policies, or, obstinately continue to be solely market-led. Awarding public contracts based on domestic industrial objectives in addition to a mere ‘value for money to the tax payer’ principle is not just a continental practice. Other western liberal economies have been pursuing similar exercises for many years. The so-called ‘buy America’ policy and offset agreements (especially in aerospace and defence) are good examples of how Americans are making sure their industrial base remains solid. It’s not just a matter of protectionism vs. liberalism – there are many ways policymakers can tackle the issue. Without going into philosophical debates here, the message is clear: It’s now time for the government to think outside the box. With no immediate prospect of new train orders, train manufacturer Bombardier has begun a 90 day consultation with staff at its Derby plant regarding plans to reduce the 3,000 workforce by over 1,400. How many times have we heard stories like this before? (more…)

Technorati Tags: bombardier, buy britain, Innovation, manufacturing, public procurement, siemens, thameslink

Against a backdrop of fairly mediocre growth of 0.5% highlighted in my last post, UK manufacturing is witnessing its sixth consecutive quarter of growth. However, one wonders whether the unpredicted fall in output occurred in April was due to one-off factors, or whether there is a true slowdown hitting the UK economy. The Bank of England seems to be betting on the first instance as it sets a monetary policy based on low interest rates for the rest of the year to keep the pound low and boost exports. The larger-than-expected April decline most likely reflects temporary hits to growth arising from the timing of Easter, the extra national holiday – which may have encouraged factories to pull forward their maintenance closures – and supply chain disruptions resulting from the Japanese earthquake. (more…)

Technorati Tags: electronics, growth, manufacturing

The Office of National Statistics (ONS) has recently confirmed the UK has avoided a double-dip recession with GDP increasing by 0.5% in the first quarter. GDP is estimated now to have returned to the level in the third quarter of 2010. And guess what? The largest contribution to the growth in this quarter was from manufacturing. (more…)

Technorati Tags: export, manufacturing, recession, SMEs

Japan’s most expensive disaster in its history – caused by an excruciating cocktail of earthquake, tsunami, nuclear alert and power shortages – has put global supply chains under far greater stress. Assembly firms are finding their supply chain, already affected by endemic component shortages and extended lead-times, now looking even more unpredictable.

Automotive and electronics manufacturers appear to be the hardest hit, where continued aftershocks, and now the fear of radioactive contamination, could extend supply disruptions for some time. For example, Mitsubishi Gas Chemical and Hitachi Chemical, control about 90% of the market for a specialty resin used to bond parts of microchips that go in to various devices. Both firms’ plants were damaged. Manufacturers around the world are now rushing to secure supplies of the scarcest components and materials, pushing up their prices. Numerous carmakers in Japan and North America including General Motors, Ford, Toyota and Honda have closed factories or scheduled downtime for plants, causing the loss of about 13% of worldwide car manufacturing output. (more…)

Technorati Tags: delays, disruptions, earthquake, japan, just in time, manufacturing, supply chain

We all know that reviews are a necessary part of Government. Policy makers need the facts in front of them in order to make objective decisions. That can’t be disputed. I even did my own for them recently.

However, the sheer volume of reviews launched by Government is certainly a trend that commentators have latched onto. I have to say the relevant bandwagon has now hit me as well. Its as if they are the panacea for every issue, every strategy and every crisis that confronts the Government. They even tried to avert a defeat in the Commons yesterday over the Ghurkas with, you guessed it, offering a review. But this was not just to be any old review. This was to be a review that concluded by August. I don’t know how many MP’s that shifted into the ‘right’ division lobby.

So it was with some trepidation that I opened the Government’s latest review on support for industry last week: New Industry, New Jobs. All well and good I thought, apart from the fact that this appeared to be a review covering virtually the same territory that the recent Manufacturing Strategy covered in July 2008. Driven through by Baroness Vadera, that particular review was seen by many as a rare example of a review that did actually have some firm proposals for action. The latest version of BERR’s ‘strategic vision’ for UK industry and its development decidedly was not.

In fact, it seemed to be me to be a symptom of that other rapidly spreading condition- Reviewitis. Not quite as deadly as Swine Flu, but equally as perplexing. For what we are with faced with as a strategy for pulling UK industry out of recession? A review that announces, or in some cases reannouces, further reviews.

While reading its basic conclusions, I was pleased to see advanced manufacturing, in particular plastic electronics, get a heavy namecheck. Likewise the reference to Digital Britain, and the crucial role it has to play in rolling out improved digital networks. At the same time, it was telling for me that no less than four out of the five major conclusions announced plans for ‘further assessment’ or made statements to the effect that future Government policy would be based on, you guessed it, an ongoing or upcoming review. In fact the only new action that I could determine that the report actually announced was- a new review into industrial opportunities in an ageing society.

This week, I will be moving on to the latest missive from BERR to hit my inbox: A Consultation on Effective Consultation. . It doesn’t bode well for my current views on these mechanisms…

Technorati Tags: BERR, EMS PCB, manufacturing, new industry new jobs