Farnborough figures mirror UK manufacturing growth trend

News editor

The Engineer’s constantly chiming email alerts let us know that orders were buoyant during the Farnborough Airshow, while the CBI’s latest survey shows that is a trend across engineering sectors

Big trade shows attract big players and it isn’t unusual for them to let the press know when they’ve confirmed a deal at the event.

This year’s Farnborough International Airshow was no different, although at one point it did seem as if two of the Very Big Players were engaged in a Battle of Announcements, such was the frequency of their notices.

An email from one Very Big Player would be followed within seconds with another from their Main Competitor and this electronic barrage continued for the duration of the show.

It’s a good job too, highlighting as it did the upsurge in total orders announced at the show compared to 2012 ($72bn), which itself compared favourably to 2010’s event where orders totalled $47bn.

An Airbus A350 wing being assembled at the firm's Broughton plant
An Airbus A350 wing being assembled at the firm’s Broughton plant

Figures released aerospace trade body ADS show orders worth $201bn placed at Farnborough, with $152bn being spent on aircraft. This is expected to generate around $30bn to the UK economy with significant elements of aircraft manufacture being fulfilled by UK companies.

Further figures from ADS show how Britain has positioned itself to respond to increasing orders, reporting as it does a seven per cent increase in aircraft and engine deliveries in the first half of 2014 compared to the same period last year. This increased rate of production means that deliveries in 2014 are so far worth around $17bn to the economy.

ADS adds that a record monthly backlog figure of almost 11,500 aircraft ‘is equivalent to around nine years work in hand, offering a stable foundation for the UK sector to continue to build its success as the European market leader.’

More good news from the CBI’s latest SME Trends Survey, which reports businesses hiring at their fastest rate since 1988.

The strong quarter has been attributed a strong rise in domestic orders and output, a trend likely to continue through the next quarter.

CBI reports also that SMEs plan to increase their investment in plant and machinery over the next year although expenditure on buildings is likely to remain the same as last year.

Exports broadly flattened in the three months to July, prompting Katja Hall, CBI’s deputy director-general to call on government to help SMEs sell their products and services to new markets around the world.

Key findings – three months to July

  • 36 per cent of SME manufacturers reported a rise in new orders, while 22 per cent said they fell, giving a balance of +14 per cent. Orders are expected to increase even more strongly next quarter (+26 per cent)
  • 31 per cent of firms said that output increased, while 16 per cent said that it decreased, giving a balance of +15 per cent. Output is expected to grow again next quarter (+19 per cent)
  • 36 per cent of firms reported a rise in domestic orders, while 19 per cent said they fell, giving a balance of +17 per cent. Domestic orders are expected to grow again next quarter (+24 per cent)
  • 18 per cent of firms said export orders rose, while 20 per cent said they fell, giving a balance of -2 per cent, disappointing expectations of strong growth (+25 per cent). Export order growth is expected to pick up next quarter (-2 per cent)
  • 31 per cent of firms said they were more optimistic about their business situation, while 11 per cent said they were less optimistic, giving a balance of +20 per cent
  • 34 per cent of firms said that employment increased, while 9 per cent said that it decreased, giving a balance of +24 per cent

The government comes under further scrutiny this morning from Energy and Climate Change Committee, which accuses the current administration of ‘punching below its weight when it comes to support for UK businesses developing innovative low carbon technologies such as smart meters, heat pumps and renewable energy technologies.’

In a statement, Tim Yeo, chair of the Energy & Climate Change Select Committee said: ‘Entrepreneurs developing exciting new sustainable technologies sometimes need help to bridge the ‘valley of death’ and bring products to market. The government should be doing all it can to support innovative UK businesses in their efforts to access the growing global market for low-carbon goods and services.

‘We were surprised and disappointed to hear businesses and academic partners, among others, express continual frustration at the lack of consultation surrounding the government’s new low carbon strategy. These innovators could hold the key to getting the UK over the line on our carbon emissions targets, but it’s going to be much harder for them to do that without better co-ordination to get us all pulling in the same direction and making better use of limited public funds.

‘It is unsatisfactory that four years after the National Audit Office criticised DECC’s support for businesses developing innovative sustainable technologies, the government still hasn’t tackled the poor communication and coordination between its low carbon innovation group and businesses and broader innovation partners.’

The Select Committee’s report ‘Innovate to accumulate: the government’s approach to low carbon innovation’ also criticizes the government for not doing enough to influence the EU on product standards which determine the market for UK innovation exports.

Finally, entries from the UK, New Zealand, Turkey, China, Germany, and Canada have made it through to the shortlist of this year’s Structural Awards 2014.

Held annually by the Institution of Structural Engineers, the completion is designed to showcase the full range of chartered structural engineers’ abilities.

The Award winners will be announced on November 14. Click here for the complete shortlist plus further information on the awards.

Similarly, the European Patent Office calling for submissions of nominations for the European Inventor Award 2015. The award pays tribute to inventors who’ve make a real contribution to social and technological progress and economic growth in Europe. The public are invited to submit a nomination to the European Patent Office.