Data: Falling profitability UK electronics manufacturers
September 2, 2024
Data shows that profitability has dropped for small and mid-sized electronics manufacturers in the UK, despite strong sales.
Electronics and telecommunications manufacturers faced a drop of 11 per cent in profitability this fiscal year, despite a strong 31 per cent increase in revenue. Meanwhile, electrical and electronic components manufacturers saw profitability rise by 17.4 per cent this fiscal year – the third highest out of all industries – and revenue rise by over 38 per cent.
On average, profitability across the manufacturing industry declined by 9.18 per cent this fiscal year, despite sales performance rising by 9.16 per cent.
The figures were revealed in the latest Manufacturers’ Health Index by inventory management software provider Unleashed. The figures are compiled quarterly based on data from purchases, sales and stock movements among SME manufacturers across the UK, Australia and New Zealand.
However, some sectors are powering through including energy and chemical manufacturers who came out on top with a 31.37 per cent jump in profitability according to Unleashed’s data, followed by furniture manufacturers at 21.89 per cent.
Other signs of improvement came from the personal care sector where Q2 profitability was up 95.63 per cent on Q1.
Sharp drop in quarterly sales revenue for UK manufacturers
UK sales performance also dropped sharply this quarter compared to the overall upward trend. Compared to Q1 2024, total revenue declined by 22 per cent in Q2 2024.
Electrical and electronic component manufacturers’ revenue declined by 44 per cent – the largest drop in revenue in Q2 2024. Building and construction manufacturers weren’t far behind with a revenue decline of 43 per cent.
Clothing and footwear manufacturers were the only industries to see an increase in revenue of 5 per cent in Q2 2024.
Despite profitability concerns, the industry has cut lead times down to an average of 23.5 days – the lowest level recorded.