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13 November 2017

EAMA: Q3 mechanical engineering posts a solid performance

While mechanical engineering companies enjoyed another strong performance in Q3, maintaining the momentum built up earlier in the year, finding skilled people remains one of the two top concerns with nearly half (45%) of firms reporting job vacancies. 

According to the Engineering and Machinery Alliance’s (EAMA) Business Monitor, the sector has now pushed through 12 months of unbroken increases in UK business enquiries and nearly two years of the same for exports.

EAMA chairman Martin Walder says that the monitor continues to be among the more positive business surveys, with excellent prospecting returns in the third quarter, slightly ahead of last year’s performance after four quarters of solid gains.

He adds: “However, it’s noticeable that converting the big increases in enquiries into orders is not following now at quite the same rate with more modest increases on orders this quarter. This could be seasonal. It probably also reflects the pauses in OEM investment and supply chain decisions. Certainly, the variability in different subsectors’ reports seems to suggest as much affecting the automotive and oil and gas businesses for example.

“As we’ve seen before, subcontractors and other companies with very flexible manufacturing business structures have been able to enjoy a big increase in demand, both from markets overseas and from companies considering reshoring activities to the UK.

“Over half (56%) of all participating firms say they are investing in all areas of the business, which of course includes staff development and training. But when forced to pause investment activities very few companies (7%) keep on investing in skills and training. This trend will have to change medium term otherwise with the arrival of digitalisation the firms will find themselves bypassed and out of business.

“Confidence remains solid with only 8% reporting confidence down this month, with Q3 monthly average of +22 compared with +9 a year ago, when ‘downers’ averaged a fifth of respondents compared with one in ten Q3 this year.”

Adam Offord

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EAMA (Engineering & Machinery Alliance)

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