MHA Manufacturing and Engineering Survey Report 2018/19

In our latest video Ginni Cooper, Partner and Nicola Mason, Corporate Services Manager discuss the results from our recent MHA Manufacturing and Engineering survey. This year there was more than 200 responses to the survey.

The MHA Manufacturing and Engineering survey covered five key areas which were financial considerations and business confidence, innovation, employment, exporting and future considerations.

In this video we answer some of the following questions;

What does Brexit mean for business confidence in the manufacturing sector?

What does Brexit mean for revenue growth? Where will the revenue growth be coming from?

Are there any financial implications?

How can manufacturers manage their costs?

With Brexit looming are manufacturers anticipating a skills gap?

To view the full report please click the link below –
http://www.mooreandsmalley.co.uk/latest-blogs/our-2018-19-mha-manufacturing-and-engineering-survey-report-is-now-available/

Our 2018/19 MHA Manufacturing and Engineering Survey Report is now available

Drawing on national and regional insight from over 200 clients and contacts, the findings of our recent survey identifies opportunities and concerns facing UK manufacturing and engineering businesses. UK SME manufacturers and engineers remain optimistic and confident about future growth, despite the uncertainty surrounding Brexit, rising production costs and skill shortages.

The respondents were from a variety of sub-sectors within manufacturing and engineering including: aerospace, automotive, agriculture, biotechnology, chemical, construction, electrical and electronic, food and drink, healthcare, leisure, metals, minerals and materials, oil and gas, pharmaceuticals, renewables and transport, to name but a few.

The report details the national findings, covering England, Wales and Scotland and also highlights interesting regional variations. Sector expert Matt Rooney, Engineering Policy Adviser at the Institution of Mechanical Engineers has provided commentary throughout the report.

Key Findings:

  • 71% of manufacturers reported revenue growth in the last year and 78% predict business growth over the next 12 months.
  • 51% have high or above average business expectations over the next 12 months (increasing to 54% over the next three years) and 50% are looking to increase their capital investment spend in the coming year.
  • 58% of respondents export products and all exporters currently do so to the Eurozone.
  • 93% believe their main competitors are based within the UK and 35% agree they’re within their own region.
  • Only 30% cite Brexit uncertainty and trading tariff concerns as their main barrier to future success and just 34% have a strategy in place for post Brexit – 66% feel they cannot plan for the impact until they know the Government’s strategy and EU response.
  • 92% believe rising production costs will impact their business next year, but in a positive move, 67% intend to absorb any price increases, rather than pass them onto customers, and 52% intend to achieve this through improved productivity and efficiency.
  • Staff recruitment is an equally big issue; 81% of respondents report problems in finding people, yet 49% expect to increase payroll numbers next year. Out of these, 63% will opt for apprentices.

Click here to view the full report.

If you would like to discuss any of the issues raised in the report in more detail or you would like to speak with a member of our team, please contact us on 01772 821 021.

MHA Manufacturing and Engineering Survey Report 2018/19

In our latest video Ginni Cooper, Partner and Nicola Mason, Corporate Services Manager discuss the results from our recent MHA Manufacturing and Engineering survey. This year there was more than 200 responses to the survey.

The MHA Manufacturing and Engineering survey covered five key areas which were financial considerations and business confidence, innovation, employment, exporting and future considerations.

In this video we answer some of the following questions;

What does Brexit mean for business confidence in the manufacturing sector?

What does Brexit mean for revenue growth? Where will the revenue growth be coming from?

Are there any financial implications?

How can manufacturers manage their costs?

With Brexit looming are manufacturers anticipating a skills gap?

To view the full report please click the link below –
http://www.mooreandsmalley.co.uk/latest-blogs/our-2018-19-mha-manufacturing-and-engineering-survey-report-is-now-available/

Additive manufacturing

Additive manufacturing, also known as 3D printing, is a process used to create a physical (or 3D) object by layering materials one by one based on a digital model, and making things with 3D printers is changing the rules of manufacturing as we know it.

3D printers are now moving well beyond making plastic objects, or even rapid industrial prototyping. Today, 3D printers can not only handle materials ranging from titanium to human cartilage but also produce fully functional components. Recently the Formula 1 team Red Bull Racing have started investigating if 3D printers could be used to recreate parts at the circuit to avoid carrying thousands of spare parts to each race track they visit. By using resin and powdered composite materials in printers, parts can be printed which are a replacement to the current carbon fibre used.

This could lead to a whole new concept to just in time engineering, with 3D printers completing parts on the assembly line, which would reduce dramatically shipping and storage costs with many stating it could be the third industrial revolution.

Currently there has not been a better time to consider the gains from additive manufacturing, as announced in the Budget from 1st January 2019 (until 31 December 2020), the Annual Investment Allowance will be temporarily increased from £200,000 to £1,000,000, which means 100% tax relief would be given in the year of purchase for the majority of the capital expenditure.

Furthermore if you use 3D printing to help with R&D processes, such as rapid prototyping, or making the manufacturing process more efficient and reduced production costs, then you are very likely to be eligible for R&D Tax Credits, which for a small company would be worth up to 14.5% of the surrenderable loss in the year.

If you would like to discuss this blog in more detail please email Paul Locker or call us on 01772 821 021.

Alternatively, please fill in the form below with your comment or enquiry and we will be in touch.

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Industry 4.0 and the Internet of things

There are four design principles in Industry 4.0; Interoperability, information transparency, technical assistance, and decentralised decisions. Focusing on interoperability, which is the ability of machines, devices, sensors, and people to connect and communicate with each other via the Internet of Things (IoT) or the Internet of People (IoP).

The development of the IoT is considered to be one of the major events in the modern day industrial revolution. Using this digital platform has enabled the transformation of better productivity and management of processes and assets.

As companies strive to be more efficient, manufacturers and engineers face the challenge of creating innovative machines and systems. The IoT is assisting them in providing these systems in the production processes at affordable prices. A further challenge is the design and implementation of these systems into the manufacturing process. One solution is to use original equipment manufacturers, and develop this either internally, or externally via subcontractors to make a bespoke low cost solution for the company, which can constantly evolve.

The bespoke development could qualify for enhanced research and development tax credits and capital allowances. For a typical SME, in terms of cost savings, R&D tax credits can attract 230% tax relief.

If you would like to discuss this blog in more detail please email Paul Locker or call us on 01772 821 021.

Alternatively you can leave your comment or enquiry in the form below and we will respond to you as soon as possible.

Chance for North West manufacturers to have say

Manufacturing and engineering firms in the North West are being encouraged to take part in an influential national survey to help reveal a detailed picture of what’s happening in the sector.

Accountancy and business advisory firm MHA Moore and Smalley is keen for as many local businesses as possible to take part in the seventh annual MHA Manufacturing and Engineering Survey.

The survey is supported by Lloyds Bank, the Institute of Mechanical Engineers and the Future of British Manufacturing initiative.

Ginni Cooper, head of the manufacturing and engineering team at MHA Moore and Smalley, said: “This is a great opportunity for manufacturing businesses to give their views about what’s going on in their sector and what can be done to support it through the uncertain few years ahead.

“The results of the survey are used to help specialist manufacturing advisers and government to understand the unique opportunities and challenges the sector is facing.

“We’re really keen for North West businesses to be represented in this national survey so that we get an accurate overall picture of what’s happening.”

The survey focuses on seven key areas: you and your business, innovation, recruitment, exports, costs, funding, productivity, energy and sustainability, and the future.

The survey can be accessed and completed by clicking here. The findings of the survey will be revealed in a detailed report to be launched early next year.

TAKE PART IN THE SURVEY NOW!

How could R&D tax credits and capital allowances benefit your manufacturing business?

In our latest Manufacturing video Ginni Cooper, Partner and David Hackett, Tax Director discuss Research and Development tax credits and capital allowances and what this means for a business.

For a typical SME, in terms of cost savings, R&D tax credits can attract 230% tax relief. An R&D project can develop a new process, product or service or it can improve an existing one.

What type of projects qualify for the relief?

• Any project that seeks to achieve an advance in science or technology.
• A project needs to aim to resolve scientific or technological uncertainties that cannot be easily resolved by a competent professional working in that particular field.

The main qualifying costs that attract relief are;

• Staff costs
• Items that are consumed in the R&D process (e.g. materials, utilities etc)
• Sub-contractor costs
• Any software you employ in the R&D project – the license fees for those will qualify.

What are capital allowances?

• A form of tax relief for capital expenditure on items such as fixtures and fittings, equipment, vans, lorries etc.
• Most businesses can obtain tax relief on up to £200,000 per annum of capital expenditure. For a company that fully utilises that allowance every year they will benefit from a year one up front tax saving of £38,000 based on the current corporation tax rate of 19%.

Ginni and David also discuss whether large companies can claim under the scheme as well as SMEs and what is available in terms of capital allowances for those businesses that are spending more than £200,000 p.a.

How can UK manufacturers and engineers remain competitive and innovative?

The extraordinary sight of a 1965 Ford Mustang powering up the famed hill climb at the Goodwood Festival of Speed recently was certainly something to behold – because this 53 year old car was driving itself! The legendary vehicle had been retrofitted with autonomous driving technology as a result of a partnership between Siemens UK and Cranfield University. Whilst the vehicle was not entirely autonomous in the truest sense as it followed a pre-determined program of the Goodwood track, the head turning vehicle demonstrated how cutting edge technology can change or augment a manufacturing process or product significantly, regardless of antiquity. In a world where the consumer is in control, innovation and adaption to change is key to remaining competitive.

One thing that stands out in the Ford Mustang example is collaboration, a partnership between two organisations working together to achieve a common goal or to make something together. Often when we consider research and development we think of trade secrets, we conjure up visions of men and women in white coats, working away on something mysterious, behind a locked door. But consider this – if we all happen to be working on wonderful things separately, think about how successful we could be if we worked together! Or perhaps the opposite – if we’re all concentrating in siloes on our own problems and challenges, surely we could benefit and solve issues quicker if we worked in unison. It may seem a strange concept but operating collaboratively has been one of the key success factors for our German counterparts where small manufacturers, larger ones and the government work together to improve the industry as a whole. Even on a small scale, our manufacturers can help each other – there have been countless times when a factory tour has created a lightbulb moment, when the sight of a process or routine can instigate a notion to replicate in order to improve one’s own business.

Another interesting element of the collaborative approach is the interaction between business and educational institution. What better way to promote manufacturing and engineering as a career choice than to get the students involved at a hands on level. The skills gap is all too well publicised and businesses can aid themselves by motivating young people, helping them to visualise the opportunities available to them. Working together with education providers, businesses can demonstrate the positive impact that manufacturing and engineering can have on social, technological, economic and environmental surroundings, in addition to the variety of skills that are encompassed within it. This would seem an appropriate way of dispelling the myths around what it means to be an engineer and inspiring the workforce of the future.

As we move towards the technologically driven future of 4IR the sharing of ideas, successes and failures will surely be a swifter way for our UK manufacturers and engineers to remain competitive and innovative.

If you would like to discuss this blog in more detail please email Ginni Cooper or call 01772 821 021.

Alternatively, please fill in the form below with your enquiry or comment and we will respond to you as soon as possible.

The manufacturing and engineering talent drought and utilisation of the apprenticeship levy

One of the most talked about realities of modern manufacturing and engineering is the shortage of skilled workers available, with severe skills shortages across the industry at an all-time high. As time goes by many skilled labourers are reaching retirement age, which lowers the number of overall skilled workers as less employees join the field. This is raising concerns about the long-term sustainability of the industry.

There are a number of issues which are causing this decline, from the perception that all manufacturing and engineering jobs involve wearing boiler suits and carrying oily rags, to the ideology that the majority of the workforce are slowly being replaced by an army of robots. This is also coupled with the image that the industry is low paying, with the majority of the work being repetitive and lacking in creativity.

Solving the talent drought is not just about attracting new entrants, but investing and buildings skills pools in areas such as AI and robotics, whilst holding onto the traditional areas of expertise which have served the industry well throughout the years. This can be achieved by creating an attractive place to work, offering new opportunities through innovation and technological advancements, and offering the training packages to students in these developments.

It has often been thought that universities would fill the skills gap, but with annual fees up to £9,250, this is not the greatest incentive, with declining numbers of students taking relevant degrees in the industry. With the government announcing the Apprenticeship Levy in the Summer Budget 2015, and taking effect on and after 6 April 2017, it is an ideal tool for manufacturers and engineers to start to bridging the skills gap.

The Apprenticeship Levy is a a Levy on all UK employers with an annual pay bill in excess of £3million. Each employer receives an allowance of up to £15,000 each year to offset against their levy payment, and in certain cases employers who are committed to training will be able to get more back than they put in. Currently the Apprenticeship Levy can help fund training in several sectors from aerospace to civil engineering, at levels from GCSE to Masters Degree.

If you would like to discuss the above blog in more detail, or you would like to speak with a member of our team, please contact Paul Locker or call 01772 821021 to be put in touch with a member of our Manufacturing team.

Lancashire Business Festival 2018

The Lancashire Business Festival is set to showcase a fantastic range of business related events taking place across the county during March 2018.

The region is well-known for hosting a wide variety of events which offer everything from business support to promotion of local services and products and the celebration of innovative organisations in Lancashire.

Local organisations supporting this exciting initiative include the North & Western Lancashire Chamber of Commerce, Shout Network, the University of Central Lancashire (UCLan), MHA Moore and Smalley, Lancashire Business View and Boost.

This year “Manufacturing Week” will play a key part in the Lancashire Business Festival. With its long heritage of manufacturing, Lancashire continues to be at the heart of the UK’s manufacturing sector.

One of the Manufacturing Week’s key supporters is accountants MHA Moore & Smalley. Danny Houghton, Partner in the company, commented, “Manufacturing within Lancashire is vibrant and diverse and the Manufacturing Week showcases Lancashire’s talent, brings in quality speakers from across the globe and offers an excellent opportunity for like-minded businesses to network and learn from each other. Bringing the Manufacturing Week into the Lancashire Business Festival opens it up to a wider business audience and the more people who know what a success story Lancashire manufacturing is, the better!”.

Book your place at Lancashire Manufacturing Week 2018.

Monday 5 – Tuesday 6 March

UCLAN New Product Development Workshop

Wednesday 7 March

Trading Internationally

Thursday 8 March

Growing your Manufacturing Business

Friday 9 March

Brexit Preparation for International Trade