Ian Barker, MD of Close Brothers Asset Finance Manufacturing division, discusses some of the challenges the sector is facing today.
It’s a tough environment for the manufacturing industry right now. According to the latest figures from the Markit/CIPS Purchasing Managers' Index (PMI), UK manufacturers have had their weakest month for nearly three years in February, with demand in the UK slowing and export orders falling.
Manufacturing expansion has also proved slower than expected and there are distinct pressures on profitability – due in part to a stronger pound and weaker overseas demand - and fears about the health of the Eurozone, a leading export market for Britain.
The challenges in this sector haven’t been as intense since April 2013, when the UK was finally emerging from the 2008 financial crisis. With manufacturing currently accounting for around 10% of the output of the UK economy and economists now warning that the sector is stagnating, it is vital that businesses, particularly those at the smaller end of the scale, get the financial assistance they need.
Traditionally companies would choose to speak to their bank for advice or financing but that is not the only, or necessarily the best option, for every business. Close Brothers Asset Finance has a long history in providing businesses throughout the manufacturing sector with a range of flexible and tailored funding options. Our finance specialists are from the manufacturing industry which gives Close Brothers an unrivalled insight into the market and an understanding of the hurdles that manufacturers are currently facing. Its experts take time to get to know their clients’ businesses and work hard to create a bespoke solution that meets their needs, be that to buy machinery or expand a workforce.
In addition, Close Brothers understands the importance of looking at the overall potential of a client’s business as well as its current performance. Not only helping manufacturers plan for growth during a favourable economic climate, but it was one of the few lenders that continued to support SMEs throughout the recession. Something the company plans to continue doing for the long term, regardless of the economic challenges that may arise.
Close Brothers’ work with the Regional Growth Fund (RGF) also underlines its ethos on helping small and medium sized business get the funding they need to develop and continue trading. To date Close Brothers Asset Finance has helped create and safeguard almost 6500 jobs across the country using two rounds of funding from the Regional Growth Fund, with a significant proportion of these in the manufacturing sector.