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Manufacturing gathered pace in September

Manufacturing grew in September, according to the latest statistics from the Office of National Statistics. The pharmaceutical sector showed a strong performance, but the gas and oil sectors unperformed, causing an 0.4 per cent drop in total industrial production, the BBC reports.

Moreover, there were further challenges for the manufacturing sector in September in the form of inflation, leading to a rise in prices for materials and the cost of fuels.  Manufacturers have also had to contend with the low value of the pound, which has made imports more expensive, but sterling is now on the rise.

Manufacturers adjusting spending plans

The immediate aftermath of the Brexit vote has not had the impact on the manufacturing sector that many had feared. However, manufacturers are adjusting their investment plans following the referendum result, according to research from the EEF.

The EEF/Santander Monitor 2016 report indicates that manufacturing firms will slow down their investment into capital equipment for the near future. 60 per cent of the manufacturers surveyed stated they will be spending either the same or less on equipment in the next two years.

Lee Hopley, Chief Economist at the EEF said:                    

“Fears of an immediate collapse in business investment appear to be unfounded for now. UK manufacturers have been investing at a healthy pace in recent years and while that rate of increase wasn’t going to continue forever, keeping up with customer needs and the competition is ensuring that investment stays on track for many.

EEF attribute this slowdown in spending to order book uncertainty. In addition, some manufacturers are already faced with ‘soft demand’, with a third of manufactures already having spare capacity, meaning they are reluctant to invest in equipment that could go under used.

The EEF also stressed the need for policies that would assist the manufacturing industry. Ms Hopley stated:

“…It’s over to the Autumn statement now to press ahead with policies that further enhance the UK business environment for spending on modern machinery and increasingly important intangible investment.”

Change in investment strategy

Manufacturers are also changing the way they invest. EEF say manufacturers would rather invest in innovation to help them stand out from the competition, allowing them to enhance productivity and to improve future demand for their products. 60 per cent of manufacturers say that investing in ‘intangibles’ rather than equipment is now more important to their businesses.

Despite the concerns prior to the referendum, the report shows that Brexit has had little impact on the manufacturing sector’s plans for future investment. There is also more optimism over exports due the fall in the value of pound.

Majority of businesses unconcerned about power cuts

A new study shows that most small and medium sized enterprises in the UK aren’t worried about winter power cuts. The research by British Gas Business indicated that 83 per cent of SMEs don’t view power loss as a threat to their business, and just 17 per cent of the 500 UK-based SMEs said power cuts were a concern.

Senior managers working in small businesses said they had lost an average of two working days in the last five years due to power cuts, while larger businesses with turnovers of £50 million or more had lost six days due to black outs. 

However, small and medium sized enterprises are being warned against complacency, and they are being urged to put an action plan in place now rather than risk losing access to heating or hot water in the winter.

Testing procedures and maintenance

The survey also indicated that only a limited amount of companies carry out testing procedures, and 72 per cent of businesses don’t have a maintenance plan in place. Moreover, 41 per cent of senior managers revealed they hadn’t organised annual services for boilers and other appliances; this figure was higher in smaller companies.

James Bennett, Managing Director of Business Services at British Gas, said:

“With winter fast approaching, now is the time for small businesses to make sure they have well maintained heating and hot water systems. Companies with annual servicing or maintenance plans in place are better positioned to focus their time on creating revenues and growth.” 

Employers are also reminded of their legal requirements to keep gas appliances, flues etc., well maintained.

Reduced risk of winter black out threat

However, there is less chance of black outs this winter, according the National Grid’s latest outlook report. The National Grid has taken steps to increase power capacity after warnings in the summer about the record low levels of spare capacity.  

The Telegraph reports the National Grid invested £123 million into ten power stations so they would stay open as part of an emergency scheme. Extra payments would be made to the power companies if the back-up support is needed.

Eggborough reprieve

The news that the Eggborough power plant in Yorkshire is to stay open has also resulted in extra capacity for the months ahead. The plant had originally been scheduled to close in March 2016, but the agreement with the National Grid means it has got a reprieve, and the plant will supply power under the Supplemental Balance Reserve scheme should capacity fall this winter.

Majority of businesses unconcerned about power cuts

A new study shows that most small and medium sized enterprises in the UK aren’t worried about winter power cuts. The research by British Gas Business indicated that 83 per cent of SMEs don’t view power loss as a threat to their business, and just 17 per cent of the 500 UK-based SMEs said power cuts were a concern.

Senior managers working in small businesses said they had lost an average of two working days in the last five years due to power cuts, while larger businesses with turnovers of £50 million or more had lost six days due to black outs. 

However, small and medium sized enterprises are being warned against complacency, and they are being urged to put an action plan in place now rather than risk losing access to heating or hot water in the winter.

Testing procedures and maintenance

The survey also indicated that only a limited amount of companies carry out testing procedures, and 72 per cent of businesses don’t have a maintenance plan in place. Moreover, 41 per cent of senior managers revealed they hadn’t organised annual services for boilers and other appliances; this figure was higher in smaller companies.

James Bennett, Managing Director of Business Services at British Gas, said:

“With winter fast approaching, now is the time for small businesses to make sure they have well maintained heating and hot water systems. Companies with annual servicing or maintenance plans in place are better positioned to focus their time on creating revenues and growth.” 

Employers are also reminded of their legal requirements to keep gas appliances, flues etc., well maintained.

Reduced risk of winter black out threat

However, there is less chance of black outs this winter, according the National Grid’s latest outlook report. The National Grid has taken steps to increase power capacity after warnings in the summer about the record low levels of spare capacity.  

The Telegraph reports the National Grid invested £123 million into ten power stations so they would stay open as part of an emergency scheme. Extra payments would be made to the power companies if the back-up support is needed.

Eggborough reprieve

The news that the Eggborough power plant in Yorkshire is to stay open has also resulted in extra capacity for the months ahead. The plant had originally been scheduled to close in March 2016, but the agreement with the National Grid means it has got a reprieve, and the plant will supply power under the Supplemental Balance Reserve scheme should capacity fall this winter.

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