Interim Partners Manufacturing Practice – Update 2019

Following on from our update at the end of H1. We wanted to update you on the latest news from the Interim Partners’ Manufacturing Practice as we close the book on an exhilarating, challenging and highly educational year.

Overview

As a lot of leading figures in the Manufacturing industry predicted, uncertainty around Brexit, escalating global trade tensions and a slowdown in the global economy took its toll.  After a couple of years of significant growth, in 2019 the Manufacturing sector has contracted at is greatest level since the summer of 2016, with total production at its weakest in the last 2.5 years. As new order inflows within and outside the UK fell, and new business exports fell for 6 consecutive months – 2019 has been cited as one of the fastest market contractions in over 6.5 years.

In September, during his presentation in our board-room, Terry Scuoler (former CEO of the EEF) confirmed investment in the UK has been down 4% YOY for the last 2 years (foreign investment down too). In Q1 of 2019 the UK entered recession. We then narrowly missed a technical recession in Q2. Economic growth has currently slowed to 1.25%.

How has this affected the hiring trends in the UK?

Our client base which is typically - Chairs / NEDs, Investors, Business Owners, CEOs and Business Unit Directors have been understandably hesitant to take any unnecessary risks i.e. acquire new business, or indeed sell parts of their business, change senior management or invest in large scale transformations.

The Interim Partners Manufacturing Practice, enjoyed a record performance in Q4 of 2018, this was then surpassed in Q1 2019. However, in Q2, given the strategic holding position that our clients took, we saw a significant decline in demand. This was true in all key sectors including industrial, energy, consumer, defence and aerospace, pharmaceuticals and medical devices. In Q3 we were pleased to see a return to buoyancy, due to important strategic decisions finally taking place.  As we entered in to Q4, and with a further delay to Brexit and the fate of our nation – we have witnessed yet again, a decline in client inquiries.

Overall, in 2019, we have nevertheless grown our Manufacturing Practice by 16% (with the majority of work won being completed in Q1 and Q3). The distribution of Interim assignments has been as follows:

CEO & MD 25%

COO 10%

CFO 10%

Operations, Supply Chain, Procurement directors 15%

Operations, Supply Chain, Procurement heads of 15%

HR 10%

Sales & Marketing 10%

IT/Data & Governance 5%

Blended in to the information above is our growing international presence – specifically France, Holland and Germany. We have also had the opportunity to partner with several consultancy firms who have required specific resource during the delivery of advisory work for their clients.

Growth opportunities in 2020

Let’s ‘GET BREXIT DONE’…! Given the tempering of demand in Q2, followed by a recovery in Q3 and then a further tempering in Q4, we anticipate a similar rise in demand, come the end of January 2020 – especially if we finally leave the EU.

As they did in Q3 of 2019, Manufacturing businesses will inevitably take bold action to realise their ambitious growth plans for 2020 and beyond.

Finally

I hope this provides a useful summary of how political and economic developments are affecting the hiring trends we’re seeing across the Manufacturing sector. This year has by no means been straight forward – but we’re proud to have supported our clients and senior network every step of the way.

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