The precision engineering sector has seen massive growth within the UK for 2021. This is down to two main factors: Brexit and the slow global recovery from the Covid-19 pandemic. With extra workload placed on importing along with added costs many UK based companies have been looking at switching back to UK sources for manufactured goods if possible. The global pandemic has created a worldwide shortage of goods which has forced prices up massively across the globe. Shipping costs have increased ten fold for containers coming from the far east. This now makes it more cost effective for companies to source locally. Delivery times have also moved out for imported goods to around 6 months which has added to importers problems.
Material Shortage Issues
A major issue that precision engineering companies have been facing is the lack of material availability. With most of this material now being manufactured within Europe there has been time added to delivery’s due to Brexit. In 2020, production of materials ground to halt due to reduced demand effected by the global pandemic. As the global economy has started to recover existing stocks have been diminished. This has created a major shortage coupled with reduced manufacturing output of new material. With the UK one of the first to roll out vaccines we have got back up to speed quickly in terms of manufacturing. Reshoring has also put extra demand on material producers which has created a need for extra capacity. The general outlook is that the material shortage issue should start to normalise in spring 2022.
Precision Engineering Outlook
Things are looking rather promising for subcontract machining companies for the remainder of this year. As mentioned above the only issues being faced are lack of material. One positive note is that this sector seems to be creating jobs for both apprentices and skilled engineers due to massive growth.