There has been signs of recovery from the UK’s Manufacturing sector in Q3 2017, with a 4.2% growth in sales, 2.9% increase in total employment and a further 2.5% rise in new companies. The figures, which are released today in the Creditsafe Watchdog Report, follow a slump for the sector in Q2 when sales and employment fell, and there was a 14% drop in new companies.
Sales in the Manufacturing sector reached £677bn in Q3, following a significant drop to £649bn in Q2. In the Food Manufacturing sector specifically, sales reached £118bn, with growth (new companies) increasing by 11.3% compared with the previous quarter.
The volume of debt owed to the sector decreased by a third over the last quarter, from £15bn to £10m, the lowest it has been in 2017. Bad debt owed by the sector, however, more than doubled, increasing from £28m in Q2 to £78m at the end of Q3. The volume of bad debt places Manufacturing in the top four sectors for the quarter, behind Professional Services (£562m), Retail (£99m) and the Banking and Financial sector (£91m).
The Food Manufacturing industry saw mixed fortunes in bad debt overall between Q2 and Q3, with debt owed to the sector decreasing by 80.95% to £395,772 but debt owed by the sector rising from £4.77m in Q2 to £45.90m, largely as a result of the failure of Whitworths Group Limited.
Rachel Mainwaring, Operations Director at Creditsafe, commented: “The figures signal that the manufacturing sector has been strengthened by strong domestic and international demand, offsetting the sluggish performance we had seen earlier in the year.
“With the sector contributing approximately 10% to GDP, an acceleration in growth this quarter signals the potential for a positive second half to 2017.
“While the signs are encouraging, the sharp increase in bad debt should also be a note for caution. Debt owed to the sector may have shrunk, but a 172.4% increase in debt owed by the sector as a whole is concerning and ultimately a barrier to future growth.”