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UK electrical manufacturers see sharp revenue decline in Q1

June 11, 2024

Revenue for SME electronics and electrical manufacturers dropped in the first quarter of the year, according to new figures reported in the latest Manufacturers’ Health Index, an assessment of SME manufacturers in the UK. It is compiled quarterly by inventory management software brand Unleashed, based on data from every purchase, sale and stock movement made by over 1,790 manufacturers over the last six years.

Electronic and telecommunication manufacturers saw revenue fall by a quarter – the third sharpest decline out of all the manufacturing categories analysed. Electrical and electronic components manufacturers also saw a decline of 20 per cent.

However, the index also showed a marked improvement in year-on-year performance for electricals – with revenue up by 11 per cent compared to the same period last year. Meanwhile, electronics manufacturers generally held fast, with a marginal decline of 1 per cent.

Across every manufacturing category analysed, firms only saw an average 2 per cent year-on-year rise, reflecting the Bank of England’s assessment of weak growth in the manufacturing sector.

The index also revealed that those who’d invested in eCommerce were reporting strong returns.

Over a third of SME manufacturers now use B2B digital sales channels – contributing to an average 25 per cent uplift in revenue, and a fifth more sales orders, across the territories in which Unleashed operates.

UK firms have diversified into B2C eCommerce too, with over two-thirds (68 per cent) using or having used  a platform like Amazon, Shopify or WooCommerce to sell online.

Joe Llewellyn, GM of Cloud ERP at The Access Group, the parent company of Unleashed, commented: “It’s disappointing to see revenue drop for manufacturers in these categories in Q1 2024, but year-on-year improvements for electricals at least are a sign that it is in a stronger place than it was previously. We know from speaking to SMEs how important technology is in driving operational efficiencies and diversifying their sales channels, and these investments are starting to bear fruit.”

According to the research, the manufacturing industry as a whole has cut lead times down to an average of 20 days – having already hit a five-year low in Q4 2023.

Llewellyn added: “Inflation has battered the manufacturing industry – but the short lead times we see today are a small reprieve and a sign that they’re in control of one of their biggest costs, their inventory. This will help them to remain resilient and take advantage of more favourable economic conditions in the future.”

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