TOP 50 MANUFACTURERS: More jobs – but clouds on the horizon

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It is encouraging to see so many companies engaged in advanced manufacturing and innovation - a key area which we must continue to push on with to achieve the ambitious growth plan set for the region.

Digging a little deeper reveals the following headlines:

n Turnover of the Top 50 has decreased by 2.3 per cent to £6.997 billion from £7.157 billion

nPre-tax profits have decreased by 41 per cent to £141m from £239m

n Employee numbers have increased by 1.2 per cent to 38,805 from 38,347

Profitability is a key metric, since this enables investment and growth for the economy and brings employment to the area.

The numbers suggest disappointing results, but further analysis shows the majority of the fall in profitability is explained by two companies.

Tunstall Healthcare Group lost £44m due to restructuring costs and operational and market challenges. A further £49m is as a result of a reduction in the profits generated by Greencore subsidiaries located here.

Despite the fall in profitability, companies in the region have continued to invest in people, as highlighted by the increase in employee numbers. This reflects a return of positivity to the economy with investment in people, plant and product development back on the agenda.

What does the future hold for the sector?

At the time of writing, a glimmer of negativity has returned with several challenges.

A significant drop in oil prices this year has had an impact on companies which form part of the supply chain to the oil and gas sector, of which there are many in the region. More recently, the slowdown in China is creating ripples across the world with uncertainty returning to the headlines.

In addition to this, the impact of exchange rates is clearly affecting the export market.

I am confident that the resilience our manufacturing companies demonstrated in the downturn will put them in good stead during what we all hope to be a brief storm.