A year of promise

Industry leaders give their views and hopes for 1997 and beyond

Based on an exceptionally strong order book in defence and considerable opportunities in managed telecommunications, 1997 offers good growth prospects for Racal. With the impressive turnaround now being achieved in our data products division, which is expected to return to profit in 1997/98, the outlook for the business as a whole is most encouraging.

Racal has been actively repositioning itself to more effectively address the changing dynamics of the markets in which it operates.

David Elsbury, chief executive, Racal Electronics

This year is likely to be the most successful year for engineering training for decades.

At last we are beginning to see real growth in those undertaking work-based vocational training in engineering and a significant rise in the number of N/SVQs awarded.

It will also see upwards of 12,000 young people begin their training towards an engineering Modern Apprenticeship.

There is real evidence that we are climbing out of recession. Unemployment in the engineering industry is running at about 2.5%, compared with a national average of 8%.

This will help tremendously in encouraging the brightest young people to undertake training in engineering and hence raise our skills base and industrial productivity.

Michael Sanderson, chief executive, EMTA

I look forward to the election of a government favourable to industry, which means what it says; continued favourable macroeconomic conditions to foster growth in the engineering industry; and an early resolution of the Government’s stance on Europe, so that UK businesses know where they stand in relation to our European partners.

Graham Mackenzie, director general, EEF

The recovery in 1997 will not be export led. Increases in consumer spending of 4.3% this year will be the main driver.

In our December survey, we forecast robust economic growth for the next two years. Manufacturing output is expected to pick up with 3.4% growth expected in 1997, easing to 3.3% as demand growth slackens.

Manufacturers are reporting their weakest export orders since February 1994, with sterling’s strength having an adverse impact.

The reputation of British manufacturers for quality and service, won on the back of exports, might ease the potential loss of orders through sterling’s strength. But if the pound stays at its high level, our 1997 GDP forecast of 3.1% would drop a quarter of a percentage point.

Kate Barker, chief economist, CBI

This is election year and industry is looking for stability. Industry has gained enormously over the past 18 years – it is leaner, more productive and competitive. But we must increase our market share through new products. This requires innovation and stability.

To develop a world class product base we must spend more on research and development. The R&D community now has a better awareness of industry and government has focused more on R&D. Industry has improved very slowly especially in the engineering sector. A big push for globalisation and an improved product base is needed. The only way is through R&D.

Prof Kumar Bhattacharyya, director, Warwick Manufacturing Group

With the election uncertainties out of the way, we expect both the US and UK capital goods market to resume their growth trends.

Our Alpha and Tornado lathe families will continue to win market share world-wide and several exciting new products will make their debut. The major European machine tool exhibition in September will signal the further enhancement of our expansion in Europe.

We do not anticipate serious inflationary pressures in the UK, which is rapidly becoming the most attractive manufacturinglocation in Europe.

Colin Gaskell, chief executive, 600 Group

The light commercial vehicle market has shown consistent growth since the recession ended in our sector in 1994 – we anticipate a flattening in demand in the year ahead.

Almost all major van makers have launched new or revised products recently and we can expect the UK market to become even more fiercely contested.

This will put margins under further pressure and both manufacturers and dealers will seek ways to reduce overheads and increase efficiency.

LDV is now firmly established as the British van specialist and is the strong number two in the UK sales charts. We expect this specialist approach to help us in 1997.

Allan Amey, chief executive, LDV