Manufacturing Slow in 2018

2nd February 2018.

Rising costs of raw materials and commodities are keeping manufacturing at a slow pace. Since the 30-year-high in new orders back in November, manufacturing has been slowing and is now at its slowest pace since June last year.

Higher prices, but a strong foreign demand are hurting the domestic market, as it struggles to keep up. Our members from the sector have struggled to match productivity with demand, particularly as many outsourcing firms struggle to make prompt payment. However, here at the Credit Protection Association, we understand the importance of the sector, particularly if we are to compete with foreign markets. We, therefore, encourage business owners to free up cash flow to accommodate rising costs.

According to the survey carried out by IHS Markit and the Chartered Institute of Procurement and Supply, January figures showed a fall in growth when compared to the figures back in December.

Demand from foreign markets has grown at its quickest rate in four years with sales increasing in US, Chinese, EU and Middle Eastern markets.

Higher costs for businesses are driven not only by the rising price of oil, but also by plastics, food products, metals and paper.

Samuel Tombs of Pantheon Macroeconomics said: “Domestic demand can’t withstand the hefty price rises that producers are being forced to implement.

“What manufacturers need to see sooner rather than later is a Brexit transition deal to avoid the risk of a more cautious and uncertain approach to investment from the sector,” he said.

Nonetheless, more than half of firms believe that production will be higher in one year’s time, as export opportunities drive optimism.

Being a small business owner is tricky at the moment. Business rates are higher, interest rates are higher, commodity costs are higher, and those grace periods keep getting longer. With Brexit uncertainty still felt, many businesses are experiencing stalled progress. Any investment is hesitantly made, and businesses are poised to unleash contingency plans. Here at the Credit Protection Association, we understand that businesses are struggling with their cash flow and need a little lift. We encourage business owners to come to us for credit and debt management and allow yourself a bit of room for manoeuvre so you can sidestep those high costs and concentrate on building your business.

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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