Interim Partners, Manufacturing H1 Update

I wanted to update you on the latest news from the Interim Partners Manufacturing Practice now the dust has settled on H1. It’s been an ‘interesting’ 2019 that’s for sure!

Let’s start with an overview of UK manufacturing;

After a couple of years of significant growth, as of May 2019, the sector is showing signs of significant contraction. The contraction is at its greatest level since the summer of 2016, with total production at its weakest in the last 2.5 years. This has also been cited as one of the fastest market contractions in over 6.5 years. New order inflows, both within and outside the UK have fallen, and new business exports have fallen for 3 consecutive months.

But why? There’s no doubt that the uncertainty around Brexit is taking its toll. Stockpiling activity has stalled following the delay, and businesses are switching supply chains away from the UK. Demand has certainly been impacted by escalating trade tensions on a global scale. The global economy is also slowing down – which hasn’t helped. A lot of leading figures in the manufacturing industry feel that things might continue to tighten before they improve.

What have been the hiring trends in the UK?

The interim market, specifically within manufacturing, enjoyed a record performance in Q4 of 2018, and this was matched in Q1 2019. This was true in all key sectors including industrial, energy, consumer, defence and aerospace, pharmaceuticals and medical devices.

This growth was spread across different functions as follows:

·        CEO & MD – 20%*

·        COO – 10%

·        CFO – 10%

·        Operations, Supply Chain, Procurement directors – 20%*

·        Operations, Supply Chain, Procurement heads of - 15%*

·        HR – 10%

·        Sales & Marketing – 10%

·        IT / Data & Governance – 5%

*However, there has been a drop-in demand for interim CEO roles and our focus has been sharpened on director and head of level opportunities.

Q2 of this year has painted a different picture and the demand for interims across the board has been tempered in line with the contraction in UK manufacturing. The two sectors where demand has remained strong is technology manufacturing and mining. We have also seen an increase in hiring demand from Germany and Holland, where the overall slowdown in manufacturing has been less severe.

Growth opportunities in H2;

Manufacturing clients remain confident that they can continue to grow. Driving production efficiencies remains a key priority, which keeps hiring needs in the market buoyant and creates opportunities for our interim manager community. We’re encouraged by what we have seen in the last couple of weeks. We had a high level of enquiries from clients for senior change and transformation interim professionals (matching that of Q4 levels in 2018).

We’re hopeful that the uncertainty surrounding Brexit will be lifting. Manufacturing businesses still have ambitious growth plans, and there has been a slight recovery in demand for senior interim talent. We’re also excited to see a growing number of new product launches and a desire to innovate in the sector – largely driven by further investment in automation and the 4th industrial revolution.

And finally…

I hope this provides a useful summary of the latest developments and hiring trends we’re seeing across the sector. If you’d like to discuss anything further, please do get in touch to organise a call. I’d love to hear from you.

Best wishes,

Laurence