Manufacturer starts 2014 in confident mood
David Davies, managing director of Axiom Manufacturing Services tells Electronics Weekly that growth starts at home for contract electronics manufacturers.
Are you feeling positive about prospects for the manufacturing sector?
David Davies: At this early stage, signs for UK industry are undoubtedly positive, with the manufacturing organisation, EEF announcing the results of its most recent survey, which predicts Britain’s manufacturing sector will grow faster than the UK economy on the whole.
It also stated that our industry could expect a growth of 2.7% over the UK’s expected 2.4%, all in all, a positive message.
It is particularly encouraging for small to medium enterprises, who have seized the opportunity the last five years has provided to streamline, focus on their skill base, ensure that costs are manageable and supply chains are as lean and agile as possible.
Entering 2014, it became apparent that the companies that worked tirelessly over the past 36 months investing time in streamlining their businesses are already reaping the rewards as the UK and global economy progresses in its recovery.
For those that still have work to do, now is one of the most opportune moments to invest within the electronics manufacturing sector, especially with UK interest rates at an all-time low and inflationary pressures receding.
Can UK manufacturers be globally competitive?
David Davies: While the outlook for the next year is encouraging, members of the UK electronics industry should still be cautious. British CEMs must recognise the need to focus on the basics and realise that while the year ahead looks promising, we cannot afford to repeat past mistakes.
Importantly, we need to accept that while maintaining and creating relationships in foreign markets is important, we cannot risk overextending ourselves by creating footprints abroad.
Let’s be realistic, lower IP, high volume orders, should be left to the large-scale foreign contract manufacturers. In the UK, a CEM should be focusing on partnering with UK OEMs specialising in high value intellectual property and low-medium orders.
Which sectors should manufacturers look to target in 2014?
David Davies: While the defence market could be considered a little slow presently, investments are picking up and there are noticeable increases in the aerospace and medical markets. When it comes to the defence sector, necessity is the mother of invention as they say, and those inventions will continue to make a real impact on 2014 commercial markets, none more so than the UK market’s adoption of cryptographic technology.
In my opinion the medical sector is one of the UK’s strongest sectors for growth and new product development. UK medical OEMs are generating excellent intellectual property (IP), however converting this IP into important new products is reliant on funding for medical start-ups and overcoming certain regulatory hurdles.
For example, the home diagnostics market has the potential to be massively lucrative. Yet it can only exist once OEMs get the Government green light and CEMs can only work with them if the funding is in place.