Despite negative indicators such as the fall in UK productivity and the decline in new-car registrations, Britain’s contract and sub-contract manufacturing sector appears to be going from strength to strength.

According to the latest Qimtek Contract Manufacturing Index (CMI), which measures the value of contract and sub-contract manufacturing orders, the sector in the third quarter of 2017 was up 24% on the second quarter, with a value
of 215 (against 174).

Compared to the third quarter of 2016, the market was up over 40%. The base line CMI figure of 100 represents the average value of the sub-contracting market during 2014.

The CMI — produced by sourcing specialist Qimtek (www.qimtek.co.uk) — represents a sample of over 4,000 companies that could be placing business; these have a purchasing budget of more than £3 billion and a supplier base of over 7,000 companies with a verified turnover of over £25 billion.

On a process-by-process basis, the strongest growth was in fabrication and sheet-metal work, which was up by 50% on the second quarter of 2017 and up 62% on the third quarter of 2016.

Machining was up by a more modest 3% on the second quarter, although still up 28% on the third quarter of 2016. Other processes, which include contract electronics manufacture and plastics moulding, were up 5% on the second quarter but down 2% on a strong third quarter in 2016.

Overall, fabrication orders made up 52% of the market, with machining on 40% and other processes on 8%.

Qimtek owner Karl Wigart said: “It is unusual to see the index jump by this amount in the third quarter, as August is usually a quiet month. This year, it was the busiest month of the year to date.

"We saw an increase in projects across all areas, but the main driver has been the phenomenal growth in the fabrication market, which is being driven by demand from the electronics industry.”