Future looks healthy for UK subcontract manufacturing sector

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Research from Subcon, the UK’s leading subcontract manufacturing supply chain show, has revealed that more than half (58 per cent) of UK manufacturing businesses currently export and exporting volumes increased for 32 per cent of them over the past 12 months.

The research also revealed 83 per cent expect to increase export levels over the next 12 months and exports are expected to grow by up to 10 per cent for half of respondents, and between 11 and 20 per cent for the other 50 per cent.

Two thirds (69 per cent) of manufacturing and engineering businesses used subcontractors in the past year, with 48 per cent expect to increase the proportion of work given to UK subcontractors over next 12 months. This is mainly driven by a lack of in-house capacity (45 per cent), a desire amongst manufacturers and engineering businesses to focus on core competencies (38 per cent) and to get access to skills that are lacking inhouse (35 per cent).

Of those engineering and manufacturing businesses that do use UK subcontractors:

  • 70 per cent outsource up to 30 per cent of their requirements
  • More than half (60 per cent) outsource £10,000-£100,000
  • A further quarter outsource £100,000 to £500,000 annually
  • One quarter have spent more on UK subcontracting over the last 12 months
  • 45 per cent are more likely to nearshore based on the developments of the last 18 months

“Given the impact of the pandemic on manufacturing, this research is a very healthy indicator for the future of UK subcontracting,” said Gordon Kirk, event director, Subcon. 

“Almost half (45 per cent) of respondents are more likely to nearshore as a result of the pandemic and 41 per cent expect to appoint new UK subcontractors in the next 12 months. A similar number confirm that they use tradeshows to source them, too, which is why Subcon remains such a critical event for this sector and why we are so thankful we are able to bring it back in-person in two weeks’ time.

“We look forward to lots of debate on the exhibition floor and conference stage to identify the trends that will define this increased activity among the subcontractor community and beyond.”

Subcon takes place 14-16 September at Birmingham’s NEC and registration is free at www.subconshow.co.uk

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