Manufacturing Sector Outputs Fall Again

The latest figures show that the UK economy’s growth slowed in the third quarter of the year, due to poor performance from the construction and manufacturing sectors. Gross domestic product grew by 0.5% between July and September, according to the Office of National Statistics, down from 0.7% in the second quarter. Part of the slowdown was due to the biggest fall in construction output in three years, a drop of 2.2%. Along with the output in the manufacturing sector, which declined by 0.3%, this marks a fall for three consecutive quarters totalling 0.9% this year. As a result UK manufacturers are struggling amid the strong pound, weak overseas demand and the slow recovery in the Eurozone.

CEO of Fashion Enter & FashionCapital Jenny Holloway comments:

“There is a lot of noise from government and organisations about bringing garment manufacturing back to the UK and although there are some movements in the right direction, retailers are often looking at their supply chains with a short-term view.

“It is no secret that the summer was hard for the high street and sales struggled in almost all categories but like many other suppliers, I have still never known it to be so quiet.

(Fashion Enter’s ‘The Factory’ in North London pictured right)

“A factory only works if it has regular orders and to do that, there needs to be a fairly stable flow of work. We’ve developed something for our Haringey factory in north London that we call the 3 x 4000 rule, where at any one time we need 4000 pieces on the cutting bench, 4000 with machinists and 4000 pieces of fabric waiting to be cut, to be able to work effectively.

“Unless the supply chain works together to ensure a continuity of work, the infrastructure won’t be here on our doorstep when it is needed to ramp up production again. As we know from what happened in the 1980s when mass manufacturing was outsourced to the Far East, once we lose the skill base it can take years to get it back again.

“Retailers need to develop a domestic sourcing strategy that works, which includes having monthly meetings with suppliers to plan upcoming orders and manage the flow of work for the quieter times in order to sustain supply.

“Made in the UK is, and can continue to be a competitive reality but only if we build a sustainable relationship between retailers and suppliers for the long term, which all starts with some open communication. Let’s get the conversation flowing to keep it that way.”

Elsewhere the service industry, the biggest part of the economy, grew by 0.7% and annual growth for 2015 is heading for a healthy, if slightly below trend, 2.3%. Forecasting analysts are predicting growth for 2016 but with a ‘bumpy ride ahead’ for those in the manufacturing and construction sectors.