UK subcontract market up 31% in 2018, despite economic uncertainty

UK subontract market
UK subontract market

Despite uncertainty for the UK manufacturing industry as a whole, the subcontract and contract manufacturing sector remained strong in 2018 and was up 31% on the previous year.

Despite uncertainty for the UK manufacturing industry as a whole, the subcontract and contract manufacturing sector remained strong in 2018 and was up 31% on the previous year. This is according to the latest Contract Manufacturing Index (CMI) figures.

The CMI for 2018 as a whole was 227, which compares to a figure of 173 for 2017.

Within those headline figures though there was a 7% downward trend through the year – although this eased off in the second half.

The CMI for the fourth quarter of 2018 stood at 222 – up 61% on the equivalent quarter in 2017 and fractionally down (0.45%) on the previous quarter of 2018.

Looking at the fourth quarter figures by process, the subcontract machining market was down 6.4% compared to the previous quarter but 47% higher than the equivalent quarter in 2017. Fabrication was down 4.1% on the previous quarter, but up 67% on what had been a pretty dreadful final quarter of 2017.

Comparing 2018 overall with 2017, machining rose by 16% and fabrication by 39%.

The CMI is produced by sourcing specialist Qimtek and reflects the total purchasing budget for outsourced manufacturing of companies looking to place business in any given month. This represents a sample of over 4,000 companies who could be placing business that together have a purchasing budget of more than £3.4 billion and a supplier base of over 7,000 companies with a verified turnover in excess of £25 billion.

The baseline figure of 100 represents the value of the subcontract market in 2014 when the CMI was launched.

Commenting on the figures, Qimtek owner Karl Wigart said: “Once again, the figures underline the critical role that subcontractors play in helping OEMs mitigate uncertain market conditions. Outsourcing production to subcontractors allows them to avoid risky capital investment when future demand is uncertain.

“While Brexit fears may be leading some OEMs to hold off on placing new work, demand for contract manufacturing is up by 18% since the referendum in 2016.

“There are, though, signs that many subcontractors are now running at or near full capacity because they too are putting off capital investment until the market regains its confidence. If this is not resolved there could be an upward pressure on prices.”

www.qimtek.co.uk

Company

Qimtek

Related Articles

Going large

Currently enjoying a substantial growth period, material manufacturer and distributor Amber Composites is more than doubling its capacity to meet demand.
12 years ago Features

Meeting the volume challenge

Growing demand from car manufacturers has led to Prodrive's composites manufacturing business moving from motorsport-sized batches to runs of several thousand for
12 years ago Features

A different approach

Supplying to companies that use composite components can be a fast-moving and highly dynamic affair, so it's crucial for any SME trying to establish itself to forge its own niche.
13 years ago Features
Most recent Articles

Exel secures deal with Chinese bus builder

Finnish composite manufacturer Exel Composites has secured a new project with Chinese automotive manufacturer Foton Bus and Coach Company to supply pultruded glass fibre composite profiles.
22 hours ago News

Zünd establishes branch in Australia

Zünd Systemtechnik has announced the establishment of its own branch in Australia. Zund Australia will be based in Melbourne serving existing and new customers from all areas of application in which Zünd is active.
2 days ago News

Login / Sign up