We might be back in recession but North-east manufacturers are showing the value of lessons learned. Marie Turbill reports.
THERE’S no denying that times are tough, as once again the UK faces recession.
But this time it seems North-east manufacturers are proving themselves better equipped to ride the storm.
Latest Government figures show 102 manufacturing firms entered administration nationally in the first quarter of 2012, 17 fewer than the year before.
Business advisory firm Deloitte says action taken since the last recession has made firms better equipped to cope with future shocks - good news for the North-east’s manufacturing sector which employs 109,000 people.
Simon Manning, manufacturing partner at Deloitte in the North-east says: “Manufacturing firms across the region have been faced with many hard decisions over recent years but in the absence of strong growth in the wider economy they have had little option other than to cut costs.
“The latest manufacturing administration figures show the steps taken by sector have made it better placed to survive a downturn in the economy and although conditions are unlikely to improve in the near future these streamlined firms will be well placed to take advantage of the upturn when demand returns.”
Even before the economy returned to negative growth, manufacturers across the region had been taking steps to preserve cash, manage commodity and staff costs and streamline their business in order to survive the prolonged period of weak demand.
Ongoing uncertainty in the eurozone, which accounts for over £5bn of exports from the North-east, together with weak demand at home and a rise in energy and raw material costs, have forced manufacturers to take defensive steps to protect their business.
Tony Sarginson, North-east regional manager of manufacturers’ organisation EEF, says lessons have certainly been learned. “The recession a few years ago brought about a lot of restructuring with manufacturers starting to look to new markets.
“Manufacturers in Teesside have been doing extremely well because of the kind of markets they are serving, many exporting to countries outside the EU. Look at companies such as Darchem, exporting to countries outside of Europe, and the success stories of SSI exporting steel to Thailand.”