Manufacturing companies in the Netherlands and Germany are outperforming their UK counterparts. They are producing at pre-corona levels again and are more optimistic about the year ahead.
Almost nine out of ten engineers surveyed (87%) for the report“State of the Manufacturing Industry 2023“1, reported that their company has at least returned to pre-COVID-19 pandemic production levels (compared with 70 per cent of the UK sample). This recovery is most evident in the Netherlands. Among the Dutch respondents, more than half (55%) say that production levels are higher than ever before.
1 conducted for Essentra Components by The Engineer magazine
Germany and the Netherlands
German and Dutch companies also seem to have experienced less severe economic impacts. 44% of the response group (compared to 35% in the UK group) said revenues remained the same or even increased during the pandemic. This trend also seems to be most pronounced in the Netherlands, where a quarter of respondents reported an increase in revenue.
Staff
On the impact of the pandemic on careers in manufacturing, however, Europeans seem to be less optimistic than their UK peers. More than half of respondents (52%) said their company has shrunk since the pandemic (compared with 45% in the UK group). And only 12% have hired additional workers (compared with 18% in the UK group).
Natural attrition in the Netherlands
Natural turnover seems to be much higher in the Netherlands. 64% of respondents say they have lost staff, compared to 39% of German companies. Almost half (46%) think their career development has been negatively affected by the pandemic. Again, respondents from the Netherlands seem to have felt a proportionally much greater impact.
Technology
When it comes to technology, European engineers seem much more positive overall. 80% of respondents say they have an active investment plan for new technologies. And 81% see technology development as a positive trend (compared to 72% of the UK group). European respondents also seem to be much more serious about digitalisation and Industry 4.0: 66% cite this as a priority area to invest in (compared to just 37% of the UK response group).
Issues
As with the UK sample, a significant percentage of respondents (79%) say they experience problems with delivery and logistics. And both Germany and the Netherlands generally see the same impact. At the same time, the majority of the sample group (94%) says they have been affected by global price increases. A significant proportion of the sample (22%) thinks that the current problems could last indefinitely.
Measures
As in the UK, organisations are taking various measures to mitigate the effects of these challenges. These include reducing overhead (45%), increasing prices (45%) and seeking new suppliers (43%). German companies seem to give greater priority to reducing overheads.
Health and safety
Two-thirds of respondents from the European group said their company's approach to health and safety has changed since the pandemic. The majority (79%) feel that their mental health is now taken seriously.
Winning with winners
Hugues Delcourt, Chief Sales Officer & Director, EMEA Essentra PLC, is not surprised that companies in Europe are recovering faster than those in the UK: "In any economic challenge, there are winners and losers, and the smarter companies try to 'win with the winners'. In manufacturing and engineering, that means a focus on companies involved in 'newer' industries, such as electrification. [...] It seems that European companies are better than UK companies at adapting to the changing environment and are better at building momentum and scale."
Caution needed
Despite the number of companies feeling buoyed by the speed of recovery, caution remains necessary, says Hugues: "It currently takes six to nine months for a new order to be delivered. And the pipeline in Q4 is slow. That is why many companies are warning that H1 will be difficult. About the second half of the year, they are more optimistic."
Talent
"Yet there will still be problems that will affect us all in the coming year. Talent is still hard to find. Especially the more skilled engineers and people working in digital and ESG. And also the decreased immigration from Eastern Europe, North Africa and India puts human resources under great pressure," Hugues concludes.
Image by Gerd Altmann via Pixabay
See also: European grant for project on future-proof production lines
