News
SMEs face ‘silent killer’
The latest Manufacturers’ Health Index from Unleashed has showed that profitability across the manufacturing sector has fallen 9.18% on average this fiscal year. This is despite a 9.16% climb in sales performance.
While alcoholic and non-alcoholic drinks producers have seen the biggest year-on-year revenue rise across all manufacturing categories analysed at 43%, they have also witnessed the sharpest decline in profits at almost 30%.
Food manufacturers followed closely behind with a 27% drop, despite revenue rising by 4%.
Commenting on the harsh landscape, Josh Mordecai, director of operations and business development for London-based tea supplier, Good & Proper Tea, said: “The last two years have been really challenging from a margin perspective. We've seen price increases across the board, as have our suppliers, and sea freight has gone up.
“We want to make sure that our teas remain accessibly-priced for the quality, and the level of service that we provide, but at the same time, we need to maintain our margin and hopefully in time improve it.”
Research from the Food and Drink Federation has highlighted the stark conditions facing UK food and drink firms, which are still battling with skills shortages, limited investment and higher production costs which, on average, have increased by 9.2%.
In contrast, other sectors are powering through, including energy and chemical manufacturers which saw a 31.37% jump in profitability.
Joe Llewellyn, general manager of cloud ERP at The Access Group, the parent company of Unleashed, was optimistic about manufacturing as a whole though: “Conditions are tough – but the culture of innovation in the manufacturing sector has never been stronger.
“As manufacturers navigate the next 12 months I’m confident the firms that survive and thrive will be more resilient, more creative and more agile than any previous era has seen.”
In other news, research has shown a trend towards miniaturisation in the alcohol sector.
