Building on strong figures for the first quarter of 2017, the sub-contract manufacturing market grew by 6.7% in the second quarter, with strong demand for machining in June offsetting a dip in May.

According to the latest Qimtek Contract Manufacturing Index (CMI), the second quarter had an index value of 174, compared to 163 for the first quarter, although it was 8% down on the corresponding quarter of 2016, when demand
was particularly strong and the index stood at 188 (the base-line figure of 100 represents the average value of
the sub-contracting market during 2014).

The CMI reflects the total purchasing budget for out-sourced manufacturing of companies looking to place business in any given month.

It represents: a sample of over 4,000 companies that could be placing business and together have a purchasing budget of more than £3 billion; and a supplier base of over 7,000 companies with a verified turnover in excess of £25 billion.

On a process-by-process basis, machining was up by 6.7% on the first quarter, despite the poor figures for May, while fabrication was up by 3.4%. Other processes, including electronics and plastic moulding, were up by 24%, albeit from a low base compared with the same period in 2016.

Commenting on the latest CMI figures, Qimtek owner Karl Wigart said: “Despite all the uncertainty for the economy resulting from the General Election and the Brexit negotiations, the contract manufacturing market remains resilient.

“Indeed, it could be that this uncertainty is leading manufacturers to turn to sub-contractors to hedge against volatile demand.

“Progress is definitely bumpy, but the long-term trend — particularly in machining — is upwards and this is borne out by what we are hearing from our members.”