The latest Contract Manufacturing Index (CMI) shows that the market for contract and sub-contract manufacturing reached a new high in 2017 — but a poor fourth quarter pointed to uncertain times ahead.

The CMI for 2017 overall stood at 173, compared to a figure of 161 in 2016 (the baseline figure of 100 represents the value of the sub-contract market in 2014, when the CMI was launched).

Machining represented 45% of the market in 2017, with fabrication at 46% and other processes — including contract electronic manufacturing — adding the final 9%.

The ‘shine’ was rather knocked off the 2017 figures by a final quarter that showed a 36% drop from the third quarter of 2017 and a 7% drop compared to the equivalent period in 2016.

The pattern in 2016 was similar, but the fourth quarter drop in 2017 was more severe than the previous year, with fabrication falling by 51% on the previous quarter and 14% compared to the final quarter
in 2016.

Machining was down 27% on the previous quarter, and the only positive move was in other processes, including contract electronic manufacturing, which was up 15% on the previous quarter and 34% on the fourth quarter of 2016.

Within the quarter, December was particularly depressed, but November was the strongest month of the year for processes other than machining and fabrication.

The CMI is produced by sourcing specialist Qimtek (www.qimtek.co.uk) and 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 who could be placing business that 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.