Predictions for the second half of 2021

That’s the topic we’ve caught in the Made in Britain Twitter net: 24 June 2021

EVERY Thursday at 1pm Made in Britain hosts #MadeinBritainHour on Twitter. During that hour Made in Britain asks questions of its 21,000 followers and the results are fascinating. Previously this information was enjoyed by the audience at the time and then left to drift away in the Twittersphere, rarely read again. So, we have decided to capture some of the best comments and re-present them for a new audience and easy reference. Some of the responses have been edited but most have been left in their casual Twitter style.

This week we discuss the outlook for the second half of the year.

Question one: are you currently seeing an increase in demand for British-made products? If yes, do you think this is short term or a permanent change?

Response: Yes, people are seeing the benefits of working with + supporting British businesses. There aren’t the same importing risks + logistics that can come with outsourcing - particularly recently given Covid and Brexit disruptions

Made in Britain: What do you see as the major driving force behind this - is it businesses trying to mitigate risks primarily?

Response: I would say so - the effects of Brexit and Covid have certainly led to many companies being more cautious in various aspects of the business due to risks surrounding how the two events might affect them.

Response: I think we should also consider the problems in the global supply chains that have been dramatically interrupted with the blocking of the Suez Canal. There are also issues with lack of containers. They are all in the wrong place and in short supply

Response: I read the other day that this will potentially impact on Christmas too, that's going to be Q3 today. If you can't container ship it what do you do? the price of doing it by air just wouldn't work for many products/producers

Response: Hence the demand for Made in Britain. Retailers have not looked for alternate suppliers yet. We will see a wider range of alternative country offerings for Christmas 2022 as retailers find new suppliers.

Made in Britain: It has been suggested that the retailers are going to have to plan for Christmas much earlier this year. Will that be enough though?

Response: If they have not been working on their Christmas campaigns for the last 3 months then they are cutting it fine. There is also Black Friday to consider. Some of the early birds are already advertising for Christmas gifts. I hope they have guaranteed supplies! 

Made in Britain: What are your thoughts on some businesses thinking that the pandemic and Brexit will be over in the near future and so are looking longer term and at the bottom line? will that affect buying from Britain?

Response: I think even if the events end in the near future, which may be optimistic, the after-effects + adjusting to it will no doubt continue in following years. The reliance on British industry over the last year has proven Britain’s capabilities and I think that’ll go a long way.

Made in Britain: Really hope it does and that Britain re-establishes itself in certain sectors too. I know @ExcellMetalSpin commented a few weeks ago at not being able to buy certain tools/machines that were British made

Response: None dedicated to Metal Spinning but perhaps there's no competing with China for example that are able to provide the latest technology and is cheaper by as much as 400%

Response: Why? What are they doing different in China! 

Response: Difference in quality and therefore price of raw materials maybe?

Response: On this occasion, quality cant be faulted in terms of machinery as they import many of the technical parts i.e. controls using siemens technology (perhaps they manufacture in China?)

Response: How do they manage to make it/sell it so cheap? Labour costs? Material costs? Economies of scale?

Response: It's understandable regarding materials especially steel, given that China supply over half the worlds steel supply localisation will no doubt drive costs down, and very likely economies of scale, as you mentioned has a role regarding various resources/ parts. Can the UK compete on this for price, unlikely given the infrastructure we have presently in the country (and a government with more focus on services)

Made in Britain: The comment about services has come up a few times. What specific examples can you give?

Response: Financial services, particularly with regards to recent trade deals MPs seem to emphasise this more, and very little benefits for manufacturing is highlighted when reading more about these deals on the gov website plus the history of the UK's shift to services since 1960's
Response: Many parts they provide is from local manufacturers i.e. steel beds, although the digital side of the machinery uses siemens controls etc. Some companies charge extortionate and we can't quite work out why, perhaps profit margins?

Response: From businesses we work with, I think Covid will have played the greater role in SC fragility. However, when it comes to the costs of inward-bound freight the rises in red tape and costs might be more to do with Brexit...

Made in Britain: Which is more likely to be resolved first? Pandemic or shipping? (that's a tough question and we won't hold you to your answer)

Response: I suspect shipping - this is more within our control; there are too many wild cards re pandemic - whether worse mutations will arise, how gov'ts will act to deal with it, effectiveness of treatments, etc.

Made in Britain: Quite probably, large margins on low volume?

Response: It must be! I forgot to add, NEW machinery from china is 400% cheaper than second hand machinery from Europe

Made in Britain: That's always been a question - how does China do it. Scale and economies of scale, can Britain increase sales/trade enough to be able to benefit in the same way?

Response: It's understandable regarding materials especially steel, given that China supply over half the worlds steel supply localisation will no doubt drive costs down, and very likely economies of scale, as you mentioned has a role regarding various resources/ parts

Response: It would be good to see the answer across the range of products from the 
@MadeinBritainGB members. Are you seeing an increase in demand? Is this due to staycations, disruptions in normal flow of goods or any other reason?

Made in Britain: There is also the opportunity for manufacturers to diversify into different products/sectors where demand is increasing due to overseas supply issues. We've seen a couple of examples of this

Response: Yes I have heard of instances in markets on this and I am sure we will face more of it in the run up to Autumn and the Christmas season

Response: This is great news. We also see more British businesses take advantage of the opportunities created by the chaos.

Response: Yes, interestingly some companies went straight for the PPE side of it whereas others looked longer term. On the PPE side one of the biggest opportunities was gloves - many didn't see that

Response: Good to see local industry plugging the gaps in SC. I wonder which of Covid or Brexit was more relevant in affecting supply chain...

Response: I would say depending on the sector...both left deep impacts

Response: Research and observations for our clients has shown a marked increase in the demand for British made goods. Facebook has over 100 Made in Britain groups with 1000's of members. all looking for goods from Blighty.

Response: That is good news

Made in Britain: Do these groups cover a wide range of sectors or are they mainly consumer product based?

Response: They are mainly consumer goods. I joined several groups. Many post requests range from garden furniture to hand tools, cosmetics to cleaning products, food, and all in between. There are some excellent opportunities for #UKMfg to source leads and sales

Made in Britain: It is surprising what is actually 'still' made in Britain. Take skincare as an example, there are a lot of new manufacturers and these are growing businesses now.

Response: A sad aspect of recent years whereby consumers find the foreign websites not British ones. UK businesses should be working their own websites much harder. 

Made in Britain: Any reason as to why they find foreign websites first?

Response: Foreign websites are worked better. They have learned how to game search engines. They use all the media marketing skills to get in front of their audiences. UK companies put a website up and then go back to selling offline.

Response: We've seen the number of enquiries for this month alone triple when comparing year on year since 2018 (we still have 4 workings days left)

Made in Britain: It's good to quote going back to 2018, We've seen many media outlets reporting staggering increases compared to this time last year, no surprise there really

Response: We were thinking it felt fairly quiet, but yearly comparisons of June told a different story, it's been positive all round and we're already looking forward to July

Made in Britain: Things started to come back a little last July/August. Are you expecting a more normal and quieter August more aligned to the pre-pandemic era?

Response: We're expecting it to be even busier up to November before Christmas takes its toll

Response: Yes we are. Hopefully this is a permanent change. Short term might indicate local buying until exports and trade deals are clearer after the uncertainty of Brexit

Made in Britain: That is good news. It would be a perfect outcome if the demand remained high locally and increased internationally. That's what we have always wanted, sell more in Britain and increase exports

Response: Temporary, most will gravitate to the cheapest product....

Response: We hope that this will be a permanent change. We have not yet felt the changes after Brexit as yet If we care about #CimateChange than this will most definitely be permanent

Made in Britain: What % of buyers/consumers do you think put climate change/sustainability ahead of price?

Response: Very few! But the bigger buyers are starting to think about sustainability rather than the price!

Question two: do you think exports of British made products will increase over the second half of the year or will factors such as Brexit and shipping issues continue to impact?

Response: Apparently exports to the EU are down £2bln in the first quarter (@guardian) and I can see this continuing It's impact both ways and China have replaced the EU as the UK's biggest importer

Response: Unfortunately I think you are right. There are deals being negotiated at the moment but they won't be in time to impact exports till end of the year

Response: Many of the deals benefit services too and are of little use to manufacturers

Response: I agree as well :(

Made in Britain: There was something similar from a food manufacturing association saying exports to the EU had halved in the sector. https://www.bbc.co.uk/news/business-57518910

Response: Yes I see that report, pharmaceuticals have also fallen

Response: Reading many comments and articles around the web there is definitely an anti EU produce factor. I would assume the same is happening within Europe. I also see the same comments about Chinese goods. In chaos there is bound to be disruption

Response: Hopefully. There are bound to be some initial complications until we get used to any new ways of exporting / shipping etc.

Response: Sadly Brexit and shipping has certainly impacted on some of our clients and we can't see that changing for a while yet 

Made in Britain: What do they do to get round that then? go elsewhere?

Response: Each client is different, some are looking towards the UK again for their manufacturing, but depending on what they produce, depends on whether that will prove cost effective (i.e. small moulded parts in super large quantities it's unlikely, sadly). 

Made in Britain: The quantities, economies of scale etc was mentioned earlier and that Britain isn't set up for that. What is stopping some manufacturers investing to be able to do super large quantities of small parts etc? 

Response: Resources, Demand, Skills. In some countries i.e. Italy, their governments actually provide grants / funding for a percentage of the new machinery to be brought in

Made in Britain: The UK Government went as far as a "super deduction" of 130%? Did that go far enough?

Response: Yes, and that was most welcome!

Response: Increase, our order books are at record highs.

Made in Britain: That's impressive, at what point did you notice things changing for the better?

Response: Our actual order book has increased month on month since July 2020, exports have increased since September to record highs for us, namely outside of the EU, especially to the Middle East, Egypt and beyond.

Made in Britain: Is it because the products are British or is it because the product is 'in demand' for other reasons? servicing specific sectors for example

Response: We are reliably told it is because Made in UK is in demand, it carries a badge of excellence, additionally the technical backup, language and ease to do business with us. Apparently we don't put up barriers when asked for deviations to specification as per some EU companies

Made in Britain: Language is an interesting point, many nations have English as their second language. Does that make a difference?

Response: It really does, especially for technical / engineering companies, nearly all consultants demand meetings and notes in English.

Response: Personally don't think there will be a uplift in exporting British goods in the short term. Mainly for lack of drivers for goods vehicles and new customs requirements at border, people on the continent just think "why bother?"

Response: Think they'll increase eventually as producers find new markets & adapt to the new environment, but Q3/Q4 of 2021 may be asking too much. Since imports are also more difficult, it would be interesting to see to what extent exporters can/are pivoting to address that.

Made in Britain: We touched upon it earlier that manufacturers could pivot to fill the lack of availability of imports. If they could then keep that market and subsequently increase exports it is a win - also helps the Balance of Payments for the UK

Response: There is some impact in the print industry ! But until everything opens up we wont know. Eg: The exhibition industry will either buy their exhibition requirements from us in the UK or bring them with them 

Question three: due to longer term shipping issues, the sourcing of Christmas products will change this year. How do British manufacturers ensure they maximise such an opportunity?

Response: There are also price increases coming along on imported goods, so it will be a good opportunity to see if British made goods can plug this gap successfully

Made in Britain: There is a huge opportunity for some British manufacturers here. Wonder if the best selling Christmas Toy for 2021 could actually be Made in Britain.....

Response: Extra attention will have to be paid to SC (redundancy of supply, early ordering, etc). Secure the right financing too e.g. invoice financing to bridge working capital gaps & to extend credit to buyers who order earlier but still pay after Christmas...

Made in Britain: That's an important consideration now and not just for Christmas, with longer lead times on many things the payment schedule and contract becomes more critical.

Response: The UK's biggest maker of Tinsel is in south Wales. Cwmbran - known locally as Tinsel Town. If supply from overseas is limited/restricted then we should look at alternative gifts made in Britain

Response: I never knew that, they're going to be busy this year. Is it just me or has there been a move away from tinsel over the years? seem to see less of it these days?

Response: We have noticed that customers are enquiring earlier for their Christmas products. Dont think the shipping is going to get better this year, if things are bought in UK it may stay that way going forward 

Made in Britain: That is really good that they are at least addressing it. Are these enquiries turning into sales?

Question four: will the new international trade deals being signed encourage manufacturers to enter new markets? 

Response: They absolutely should do but we have a history of being commercially insular (& lazy) & not proactively reaching out to new markets abroad. Perhaps a tax incentive on exports might encourage?

Made in Britain: How would you suggest a tax incentive would work? how big an incentive?

Response: A period of proportionate refunds of corporation tax for new overseas sales perhaps. Embryonic idea but the Queen's Award for Exports seemed to be able to pick up this business activity.

Response: That's a good idea, especially if it there were refunds for new products into new countries too which will 'tick' the #innovation and R&D buttons as well. 

Made in Britain: It is thinking like this that might help to stimulate manufacturers to explore new markets and exporting. Increasing exports would also have other benefits which may allow businesses to scale up, hence making HMRC more corporation tax in the near future

Response: With trade deals with smaller economies, I don't see how, British made luxury goods have a small markets of middle class buyers in such places, where as people want cheap imports from such countries. I think such trade deals will be a net loss for British manufacturers. What would be truly transformational would be if UK government mandated circular economy and invested heavily in "insourcing" eg. The Preston Model. The only upside to Brexit is we could enforce this, not attached to EU procurement rules, but worried Govt to afraid to grasp it

Response: This is a long term strategy. The new markets are opportunities & we are beginning to see some of the detail now. I would encourage everyone to look at consultation documents for countries where they are interested in entering so that they are as well equipped with market data

Response: There will be winners and losers in certain industries for sure. UK Manufacturing need to be proactive and let everyone know what we are capable of. Especially for the new markets we can target overseas

Response: A trade deal is only the starting point. It is for UK manufacturing to seek out markets with innovative products the world wants to buy. The UK Gov can encourage this with incentives and support. Create an environment for UK business to succeed

Join Made in Britain on Twitter at 1pm every Thursday for #MadeinBritainHour. We engage with everybody, members and non-members alike (some of whom become members as a result). Hopefully, see you there.

This page has links to all the previous Twitter conversations we have 'caught in the net': CLICK HERE.

By Made in Britain 2 months ago | Made in Britain news

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