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Rising energy & raw material costs fail to quell NI manufacturing growth

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Stephen Kelly, Manufacturing NI; Maureen Treacy, Perceptive Insight; and James Donnelly, Tughans.

Stephen Kelly, Manufacturing NI; Maureen Treacy, Perceptive Insight; and James Donnelly, Tughans.

Stephen Kelly, Manufacturing NI; Maureen Treacy, Perceptive Insight; and James Donnelly, Tughans.

More than half of Northern Ireland’s manufacturing businesses are experiencing growth so far this year, according to a survey conducted by Perceptive Insight for Manufacturing NI and Tughans.

Compared to April 2021, the growth reported by 52% of the businesses surveyed marks a four per centage point increase. There is also a decrease in the number of companies (11%) describing their business as reducing or contracting against the same period last year when 17% reported downturns.

While GB suppliers’ unpreparedness and unwillingness to adopt the new Brexit regulations remain a significant barrier to trading, the top four most prevalent concerns include rising energy costs, cost of doing business, availability of raw materials and the recruitment of skilled workers.

Nearly all (98%) manufacturing firms have experienced an increase in energy costs in the last 12 months while 2% say theirs have remained the same. As a result, 49% are planning investment in green technology and energy efficiency measures.

The cost of doing business and particularly expenditure on transportation has affected more than 80% of businesses, of which 25% mentioned the increased cost of doing business as the main obstacle for the recovery of their firm.

Ninety eight per cent of manufacturers have faced growing costs of raw materials and 36% of them believe their GB suppliers remain unprepared for the new requirements.

Disrupted supply chains are the biggest obstacle to the recovery of 14% of the firms surveyed and 66% say they require supply-chain support to mitigate the impacts of Brexit and Covid-19 as the economy reopens.

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As a result of the recruitment crisis, 58% of firms are exploring automation and investment in technology to mitigate the effects of labour shortages.

The survey, which is supported by Tughans law firm, was conducted by Perceptive Insight from April 1 to 22 with participation by 130 Northern Ireland companies.

“The survey demonstrates that despite very difficult headwinds from rapidly rising input costs and the complications of Covid and Brexit, our manufacturers again demonstrate they are positive problem solvers and increasingly picking up new business in markets at home, in the UK, EU and across the globe,” said Stephen Kelly, chief executive, Manufacturing NI.

“It is a clear illustration of the determination of the sector to get through the turbulence despite current minimum public assistance. Manufacturers are again leading the economic fight back and with the right environment are poised to ensure we recover our status as an industrial powerhouse”.

James Donnelly, head of corporate at Tughans, said: “Despite worsening trading conditions, many of our clients in the manufacturing sector are reporting strong growth in the last year.

“The changing conditions are seeing a greater appetite to adapt through investment in plant and automation, new energy systems and sourcing raw materials.”

Northern Ireland’s top three manufacturing sectors include machinery and equipment; rubber, plastic and other non-metallic mineral products; and wood, paper and printing.


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