Private sector activity is expected to be broadly flat in the three months to August (+1%), marking the lowest expectations for private sector growth since February 2021. That’s according to the CBI’s latest Growth Indicator.
Within this, manufacturing output growth is expected to remain solid (+23%). Business & professional services activity (-1%) and distribution sales (+3%) are expected to be broadly flat, while consumer services activity is expected to fall (-23%).
CBI’s latest business surveys also show a sharp deterioration in optimism over the three months to May, across all key sectors. The fall in confidence among manufacturers (-31%) and business and professional services (-21%) was the sharpest since mid-2020.
Expectations for the next three months contrast with reported growth in the three months to May, which picked up slightly to a six-month high (+23%, from +19% in April).
Both business & professional services activity (+28% from +22%) and manufacturing output (+30%, from +19%) saw faster rates of growth. Distribution volumes grew at a similarly solid pace to last month (+23%, from +25%), whilst consumer services output remained broadly flat (0%, from +3%).
Alpesh Paleja, CBI lead economist, said: “It’s worrying that expectations for private sector activity have worsened, but unsurprising given that headwinds continue to intensify. With the cost-of-living crisis front of mind, consumer services firms will particularly be feeling the squeeze in the coming months and beyond.
“The Chancellor’s new targeted support package for low-income households is the right thing to do and will help people facing real hardship. But addressing faltering business confidence will require more action.
“Amid a worsening economic outlook, the Government must work with business on a genuine plan for increasing business investment and get growth going again, particularly as costs continue to soar.”
A supplementary question this month asked what actions, if any, businesses were taking and/or planning to take to strengthen supply chain resilience in response to ongoing global supply disruption. The most common response was holding higher levels of inventories temporarily, which a majority of manufacturers (68%) and distribution firms (59%) are doing or planning to do, while around a quarter (23% and 24% respectively) were doing so on a permanent basis.
The second most cited option was to diversity supply chains (48% and 36%). By comparison, onshoring (11% and 5%) or nearshoring (8% and 5%) part or all of operations were the least popular options.
Caddick Construction to deliver new housing development in West Yorkshire for WDH
WDH and Caddick Construction have officially started on site delivering the 43-home Sowgate Lane development in Ferrybridge, Knottingley.
Providing a mix of two and three-bedroomed modern family homes, there will be 30 properties for affordable rent and 13 for sale with shared ownership, helping local people get onto the housing ladder by buying an affordable share in their home and paying an affordable rent on the rest.
This £5 million development will be landscaped, transforming the former scrubland site in West Yorkshire. The 43 homes will be well insulated and energy efficient, helping to keep the cost of energy down for customers.
Sue Young, executive director of investment at WDH, said: “As a business we are always looking for opportunities to provide high quality homes within the local area, both for affordable rent and sale with shared ownership.
“This scheme will enhance the area, providing more families and professionals with great places to live, and offers a range of modern living options for prospective customers with excellent transport links to the M62 and A1. By investing in our local area, we are creating homes for those who need them in an area that is always in high demand.”
Richard Greenwood, director of housing at Caddick Construction, said: “This high quality scheme will help to meet local housing needs, providing a range of two and three-bedroomed homes.
“As a local developer, Caddick Construction is well known for building large commercial developments but less so for delivering housing. However, our residential division has seen huge growth over the last two years and the Sowgate Lane scheme on our doorstep is a perfect example of how we are helping to deliver much-needed homes for the local community.”
Caddick has been appointed as the main contractor and its team and subcontractors will be local, including three apprentices.
The architect on the scheme was Watson Batty Architects Limited from Leeds.
Laboratory equipment supplier snaps up West Yorkshire business
Nottingham-based Scientific Laboratory Supplies (SLS) has snapped up two businesses, Gem Scientific, based in West Yorkshire, and Northern Balance, based in Gateshead in North-East England, to expand its product and service offerings.
Both companies will continue to operate as independent entities and retain all employees, whilst harnessing SLS’s business support and infrastructure to benefit all parties, stakeholders and customers.
Gem Scientific is a laboratory equipment distributor, supplying high quality products – including hygiene testing devices and consumables – to sectors such as the food and beverage industry. This acquisition will help to strengthen both brands in this field, giving customers greater access to a wider range of products. Becoming part of the SLS family will also reinforce and supplement Gem Scientific’s supply chain and provide the company with additional operational support to encourage further growth.
Northern Balance is a provider of weighing solutions focusing on calibration, servicing and maintenance. The company has a team of highly experienced, customer-facing engineers. This provides an opportunity for SLS to develop a designated service business to enhance its current operations with even more expertise and resources.
These acquisitions signal the start of a long-term growth period for SLS, which plans further acquisitions and recruitment to broaden its portfolio into a wider geographical area, including the UK, Ireland, East Africa and beyond.
Justin Welton, Managing Director at Gem Scientific, said: “We are committed to providing clients with high quality and innovative products, backed by first-class service and support. The new partnership with SLS will help to accelerate our growth, enhance our capabilities and expand our product portfolio. This is truly a great outcome for all our employees, partners and valued customers.”
Daniel Egan-Sheath, Managing Director at Northern Balance, added: “We share a similar mission with SLS, and have closely tied values, focusing on delivering high quality products with the best possible customer service. This new working relationship with SLS will help us expand our capabilities and national footprint to provide a more thorough service to our customers.”
Ian Roulstone, Managing Director at SLS, said: “These new additions to the SLS Group provide further opportunity to serve more customers with a broader range of products and first-class service.
“The move also secures the roles of all existing personnel and will provide further development and recruitment opportunities within a growing organisation that is completely customer focused.
“This is an important milestone for the SLS Group, and keeping the customer at the centre of our strategy will continue to drive us forward as we increase our product offerings and expand into new markets and geographies.”
UK manufacturing growth slows as output, new orders and employment rise at weaker rates
Growth in the UK manufacturing sector eased during May, as rates of expansion in output, new orders and employment all decelerated. The slowdown was driven by weaker growth of domestic demand, lower intakes of new export work and ongoing disruption caused by stretched supply chains, rising cost pressures and the war in Ukraine.
The seasonally adjusted S&P Global / CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) posted 54.6 in May, unchanged from the earlier flash estimate and down from 55.8 in April. The PMI – which is calculated from five subindices – has remained above the neutral 50.0 mark for 24 months.
Manufacturing output increased at the slowest pace since October 2021. The performance of the consumer goods industry was especially weak, with production falling for the first time in 15 months. Growth slowed at intermediate goods producers, but accelerated in the investment goods category.
May saw the weakest increase in new work received during the current 16-month sequence of expansion. Supply chain issues, subdued client confidence, signs of economic slowdown and reduced export order intakes all stymied new order growth.
New orders declined in both the consumer and intermediate goods sectors. The downturn in the former also reflected the impact on consumer demand of the current cost of living
crisis. Investment goods producers saw new work intakes rise at a quicker pace.
May saw new export orders decline for the eighth time in the past nine months. Companies attributed lower inflows of new work from overseas to Brexit difficulties, transportation delays, shipping disruptions and the loss of orders due to the war in Ukraine.
Weaker growth of new orders led to reduced backlogs of work and increased holdings of finished goods inventory. Stock levels rose due to intentional replenishment and delays in
the despatch of finished goods to clients.
Stretched global supply chains and the associated scarcity of certain inputs also contributed to input price increases and rising levels of purchasing to build-up safety stocks.
Input cost inflation stayed substantial in May, easing from April’s near-survey record high. Chemicals, energy, food, freight, fuels, gas, metals, oil, plastics, polymers, timber, and
transportation (air, land and sea) were all reported as being up in price. China lockdowns, exchange rate factors, sanctions on Russia, the war in Ukraine, supply chain disruption and
raw material scarcity also drove up purchasing costs.
Part of the increase in input costs was passed on to clients in May. Selling prices rose at a rate close to April’s surveyrecord high. The increase was linked to inflationary pressures,
material shortages and rising labour and energy costs.
Input buying activity rose for the sixteenth consecutive month in May, while stocks of purchased goods rose at the quickest pace in three months. Rising demand for materials
combined with stretched global supply chains led to longer delivery times from vendors. That said, lead times increased to the weakest extent in over a year-and-a-half, suggesting
that the pressure on supply chains was past its peak.
UK manufacturing employment rose for the seventeenth successive month in May, albeit at the slowest pace since last October. The outlook for the sector remained positive, with 55% of manufacturers expecting output to rise over the coming year. However, confidence slipped to a 17-month low, amid fears of a possible global recession, rising cost pressures and stretched world supply chains.
Commenting on the latest survey results, Rob Dobson, director at S&P Global Market Intelligence, said: “The rate of expansion in UK manufacturing output eased to a seven-month low in May as companies face a barrage of headwinds. Factories are reporting a slowdown in domestic demand, falling exports, shortages of inputs and staff, rising cost pressures and heightened concern about the outlook given geopolitical uncertainties.
“The consumer goods sector was especially hard hit, as household demand slumped in response to the ongoing cost of living crisis. With both input costs and selling prices rising at rates close to April’s peaks, the surveys suggest that there is no sign of the inflationary surge abating any time soon. Manufacturers continue to report issues getting the right materials, at the right time for the right price, and energy prices remain a major concern.
“Forward-looking indicators from the survey suggest that a further slowdown may be in the offing. Business optimism dipped to a 17-month low and weaker demand growth led to surplus production, meaning warehouse stock levels are rising. Any reversal of this stock-building trend could reinforce the drag of other headwinds and add to downside risks to the outlook.”
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “A softening in overall output growth amongst manufacturing companies in May revealed the slowest rate of expansion since October as supply chain managers pointed to war disruptions and unrelenting price hikes as reasons for this unwelcome trend.
“Though new order levels rose for the sixteenth month they were noticeably softer and driven largely by the domestic market. Export levels fell, hindered by Brexit customs controls and general global disruption. This was especially evident in the consumer goods sector which suffered a sharp fall in overall output as nervous consumers concerned about rising food and energy costs reined back their spending.
“Though the strain on vendor performance eased there is little in this month’s figures to encourage the manufacturing sector and optimism fell to a 17-month low. Suffering a potent cocktail of more disruptions, rising cost pressures and a go-slow UK economy, businesses will be on a knife edge that any business decisions will be the right ones for
the coming months.”
Lincolnshire homebuilder’s new developments to bring boost of over 480 jobs
David Wilson Homes North Midlands has announced that its new developments in Lincolnshire will underpin approximately 486 jobs for local people.
Off Len Pick Way in Bourne, David Wilson Homes is set to deliver a total of 141 new homes at The Willows, where workers in the area will also benefit from the jobs throughout the development process.
The housebuilders predominately employ local sub-contractors and tradesmen, including apprentices, so local businesses and people will benefit directly from the jobs.
Mark Cotes, Managing Director at David Wilson Homes North Midlands, said: “Our new developments in Bourne will provide much needed housing in the Lincolnshire area. This is also great news for the local economy with the jobs that will be underpinned whilst we’re building the new homes.
“We aim to support local sub-contractors and tradesmen where possible to ensure the areas in which we build benefit directly from our developments.
“Our dedicated team at David Wilson Homes is very much looking forward to helping people find the right homes for them, with the great variety of homes available across the two new developments.”
XPO Logistics introduces soft drinks distribution partnership with Princes Group
XPO Logistics, a leading provider of freight transportation services, has been awarded a multi-year contract by the Princes Group to distribute its soft drinks in the UK. XPO will provide palletised distribution using full-truckload service from a Princes warehouse in Bradford, West Yorkshire.
The XPO solution involves the transportation of palletised soft drinks from Princes’ warehouses to customers throughout the UK, including major supermarkets, convenience stores, foodservice operators and wholesale suppliers. The XPO operation uses a mix of core fleet vehicles and shared user transport and provides Princes with real-time visibility and vehicle tracking into the progress of deliveries.
Dan Myers, managing director – UK and Ireland, XPO Logistics, said, “Princes Group encompasses so many recognised and loved brands found in kitchen cupboards up and down the country. Being a critical part of Princes’ supply chain is testimony to the relationship we’ve built together and the trust Princes has in the XPO team.”
Funding helps compliance firm gear up for growth as new rules boost demand
A Yorkshire consultancy that helps firms to meet the standards required by the UK’s financial services watchdog has secured a £200,000 loan from NPIF – Mercia Debt Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund, as new rules increase demand for its services.
The Compliance Company helps financial services firms and those offering consumer credit to gain authorisation from the Financial Conduct Authority (FCA) and comply with the rules. The company, which currently employs 15 staff and has offices in Leeds and Derby, has increased client numbers by 13% in the past year. It now supports around 350 businesses throughout the UK such as lenders, insurance brokers and claims management companies as well as motor dealers and retailers offering payment plans.
The funding will enable it to gear up for the expected growth in demand as tougher standards are introduced and regulations are extended to other sectors. From July, funeral plan providers must be authorised by the FCA, and the government is also planning to regulate some types of ‘buy now pay later’ lending and crypto assets.
Meanwhile, firms which are already regulated are facing new obligations, such as the Consumer Duty guidance which aims to improve the standards of care they offer consumers. Further initiatives include efforts to promote diversity and inclusion and encourage investment in green energy as the UK moves towards its net zero goals in the financial services sector.
The Compliance Company was founded in 2013 by Ian Beardmore after the FCA took over as the UK’s financial regulator for consumer credit. It was one of the first consultancies to help companies comply with the demands of the new regime and is now one of the leading firms of its type in the UK. The business, which also offers e-learning courses, expects to create at least two new jobs in the coming months.
Ian Beardmore, founder, said: “As the regulatory landscape has undergone a major shake-up in recent years, our consultants have been helping companies to navigate the changes and operate in a compliant way. The company has been expanding steadily and the introduction of new standards will only create additional demand for our services. The funding from Mercia and NPIF will help us to take the business to the next level.”
Andy Clough of Mercia said: “FCA regulation is vital to protect consumers but the rules can be a real burden to smaller businesses without a dedicated compliance specialist. The Compliance Company plays a valuable role in helping them to meet their obligations, and in supporting a vibrant financial services sector. The business is already one of the UK market leaders and the funding will help it to continue its growth and take advantage of new opportunities.”
Success at Business Lincolnshire’s Greater Lincolnshire Manufacturing Conference 2022!
Lincolnshire and Rutland manufacturing businesses enjoyed a packed programme at the annual Business Lincolnshire event, learning how to make their organisations more sustainable to achieve net-zero.
After a three-year hiatus caused by the pandemic, the annual conference was held at Kenwick Park Hotel in Louth on Friday 20 May, with this year’s theme focussed on ‘de-risking for a sustainable future’.
Organised in partnership with NatWest and sponsored by Greater Lincolnshire Engineering and Manufacturing (GLEAM) network, the event was free to manufacturing business leaders across the Lincolnshire and Rutland region, aiming to provide a better understanding of sustainable business practices.
The conference gave industry leaders the opportunity to discuss multiple topics, such as the practicalities of carbon capture and storage, sustainability in the supply chain, as well as providing insights into taking the first steps towards becoming net-zero. The day also included interactive workshops which allowed delegates to network and discuss sustainable practices within their own business models.
After lunch, local manufacturers Micronclean and Wolds Manufacturing Services provided exclusive tours to round off the event, offering delegates the opportunity to explore their on-site facilities and share advice on sustainable business practices.
Bob Eyre, director at Eyre Trailers, attended the conference and said: “It was a fantastic event in every respect… meeting likeminded people, people who can help progress our varied types of business and those at the sharp end who have their daily load to carry.”
Samantha Harrison, head of the Business Lincolnshire Growth Hub at Lincolnshire County Council said: “We were thrilled to see the return of the Greater Lincolnshire Manufacturing Conference and were so pleased to be able to host the event in a beautiful setting for the first time in three years!
“Greater Lincolnshire and Rutland has a strong and productive manufacturing and engineering sector, currently employing 66,000 workers, and contributing £4.76 billion – 20% of our total economic value. This conference plays a vital role in our region’s manufacturing community by providing opportunities for people to network, share ideas and seek out solutions to common challenges, and to hear about new developments from industry leaders.
“The event was a great success, but if any local manufacturing businesses missed the conference, we have a number of industry support programmes on offer year-round, so please get in touch with our team to discuss.”
Major refurbishment gives historic Hull building new lease of life
Work has completed on the £2.45 million restoration of a landmark Grade II Listed building at the heart of Hull city centre’s Old Town, that had previously sat empty for more than a decade.
79 Lowgate, which was built in 1881, is in a prominent position on Guildhall Road overlooking Queens Gardens, and has now been transformed into a modern new office building.
Up to 175 staff in Hull City Council’s social services teams will now relocate there from Brunswick House on Beverley Road and other local offices, as part of the council’s ambition to bring its staff into one central area known as the Guildhall campus.
The work was carried out by Yorkshire construction firm, Hobson & Porter, which won the contract via the YORBuild2 framework and as part of the procurement process, the contractor was actively involved in developing the design prior to work starting.
Hobson & Porter has now completely refurbished and reconfigured the five-storey building, complete with new staircases, changing rooms, showers and kitchen facilities on every floor. In addition, a new contemporary steel framed glass atrium has been built linking 79 Lowgate to the adjacent Warehouse 8 building.
The building now benefits from wheelchair friendly level access and a new lift has been installed. An original spiral staircase, which is protected by a preservation order and leads up to the building’s iconic turret, has also been restored.
Energy saving initiatives include rooftop solar panels, an energy efficient heating system and intelligent LED lighting. Finally, external improvements have been carried out to both 76 and 78 Lowgate, as well as at Warehouse 8 fronting Queens Gardens.
79 Lowgate was originally the headquarters of wine and spirits merchant Samuel Mason. More recently it was used as the City Record Office by Hull City Council, but has sat empty since 2010, when the archives were transferred to the Hull History Centre.
Paul McKenzie, site manager from Hobson & Porter, who led the 12-month project, said: “The age and condition of 79 Lowgate meant we faced a number of challenges on this project. We needed to work with expert craftspeople to carefully preserve the building’s historic features, whilst combining the latest construction techniques and energy efficient technology, which made it a rare project to work on.
“It’s very rewarding to be able to repurpose a building for the 21st century, while maintaining all the architectural heritage and elegance that makes 79 Lowgate so special.
“This included everything from restoring the spindles and handrails on the spiral staircase up to the turret, which was originally a lookout for boats coming into Hull loaded with wine and spirits, through to discovering the original cobbled loading bay when we dug down at the rear of the building. We then painstakingly removed and re-laid this to create an interesting feature on the corner of Guildhall Road.
“Ultimately this project has both protected and modernised part of Hull’s history and brought one of the city’s landmarks back to life, as well as creating a state-of-the-art office environment for Hull City Council, so it’s definitely a job that everyone involved can be very proud of.”
Councillor Paul Drake-Davis, portfolio holder for economic and business regeneration at Hull City Council, said: “The investment to restore this historic building will not only make this part of the city look nicer, but it will also see council staff at the heart of the city centre. Hopefully, the restoration will give something back to the local economy that’s been hit so hard in recent years.”
Yorkshire & the Humber had a challenging year for FDI, but remains the North’s most attractive place for investment
Yorkshire and the Humber was home to 40 Foreign Direct Investment (FDI) backed projects in 2021, according to the 2022 EY Attractiveness Survey.
The region’s 2021 performance was down on both 2020 (55 projects) and 2019 (59), although key sectors, including the digital technology sector, did see an improvement in performance from the previous year. By comparison, total UK project numbers grew 1.8% from 975 in 2020 to 993 in 2021. Elsewhere in the North of England, the North West picked up 74 projects (down from 85 in 2020, but up from the 73 in 2019) and the North East was home to 30 projects (down from 32 in 2020, but level with 2019).
Yorkshire and the Humber’s decline from 2020 is largely down to a fall in its share of ‘new’ – rather than extended – UK projects. Having secured 39 new projects in 2020 (5.4% of new UK projects), the region had only 26 in 2021 (3.4%).
The latest data mean Yorkshire and the Humber secured 4% of all UK projects, down from 5.6% in 2020 and 5.3% in 2019. The North’s share of projects was 14.5% in 2021, down from 17.6% in 2020, but broadly in line with its 2019 14.6% share.
However, there are some positives for Yorkshire and the Humber, with 5.2% of investors surveyed by EY describing it as the UK’s most attractive place to invest – ahead of both the North West (4.8%) and the North East (3.2%).
The key sectors in the region in 2021 were digital technology (10 projects), agri-food (four), and business services (four) – with digital projects doubling from the five projects last year to reach the second highest annual total in the last five years. Meanwhile, manufacturing projects regained their place as the region’s leading investment activity (11 projects) for the first time since 2017, while business services (10) and Research & Development (nine) rounded out the top three. R&D projects were at their highest level in the last decade.
Suzanne Robinson, EY’s Yorkshire managing partner, says: “Yorkshire had a challenging year for FDI in 2021, as did the wider North of England. Beyond the headline figures, however, there are still reasons for positivity. Yorkshire has done well in some high value areas, particularly digital technology and Research & Development. It’s not just the volume of projects that matters – one high value project can bring more jobs and investment to the region than five smaller ones.
“Across Europe, there is a swing towards investment in manufacturing, a sector in which Yorkshire has historically done well. Combined with the growing importance of ‘cleantech’, the region has an opportunity to establish itself as a key European home for developing and building the green technologies needed for the UK to reach its Net Zero targets.
“One thing which is consistently very clear from investors is that the strength of local business networks matters when they’re choosing where to site their projects within a country. Local skills and infrastructure, support from regional development bodies and access to regional grants are also part of the mix too, reinforcing the importance of devolving power and fostering local ecosystems. Building a unique sense of place from in its economy will help the Yorkshire and the Humber build its attractiveness to investors.”
The leading location for FDI in Yorkshire was Leeds (15 projects), which was the seventh biggest UK location for FDI outside of London.
