Four out of five US firms expect to see an increase in sales between now and October, with 64 per cent indicating they are planning to boost investment over the next six months as they look to the future.

Out of 41 firms questioned by the Manufacturing Growth Programme (MGP) and SWMAS (the South West Manufacturing Advisory Service), 63 per cent highlighted an increased need to recruit staff over the coming months.

The barometer took an in-depth look at how manufacturing SMEs are recovering from the pandemic. The research showed that more than half the US respondents now expect to return to, or exceed, their pre-Covid-19 position within three months.

Although 80 per cent of the region’s firms have used the Government’s furlough scheme at some point in the last year, only 39 per cent are still using it today.

The report also revealed that new working practices are being implemented because of the pandemic. Over a third (37 per cent) of the business leaders questioned are now planning to offer their employees some level of remote working, up 25 per cent on the number who were offering this before the virus began.

Martin Coats, managing director of the Manufacturing Growth Programme, said: “Small to medium-sized manufacturers in US and Humber experienced a positive quarter’s trade between January and March, with 46 per cent reporting an increase in sales, compared to 30 per cent in the previous barometer.

“Whilst Covid-19 has been challenging, it has accelerated new ways of working, some of which have proven to be more effective.”

Mr Coats said that nearly two fifths of the region’s manufacturers have said they will continue to offer some form of remote working going forward, which he said would have been unheard of 15 months ago.

“These beneficial changes will offer employees more flexibility and, ultimately, a better work/life balance,” he said.

“Firms often cite that recruiting skilled staff can be a challenge. With this in mind, it is vital that they understand the working practices offered by other employers across the sector to help them compete and attract the best talent.

“The intelligence within this quarter’s Manufacturing Barometer offers businesses a unique advantage in terms of supporting their future growth ambitions.”

Whilst the Chancellor heralded his “business-friendly” budget earlier this year, only 29 per cent of respondents felt that the measures introduced will aid recovery.

Nearly half said that they don’t think the budget will affect their recovery. The researchers said this indicates that it may not be tailored to the needs of the manufacturing sector.

Mr Coats said: “SME manufacturers are definitely feeling confident about the future, but there will still be a lot of challenges to overcome, not least the availability and lead times of material. The Government will need to consider future support to help the manufacturing industry navigate the coming months.

“In terms of digital infrastructure, 56 per cent of management teams believe what they already have in place is sufficient for their future plans. However, 17 per cent recognise a need for support in this area, and this may become an issue for more businesses as the sector continues to adapt.”

Mr Coats said that 17 per cent of US respondents have invested in IT skills training to help their employees feel comfortable with this new way of working. In addition, one fifth of those questioned are planning to offer mental health awareness support/training to their workforce.

“This shows that manufacturers understand the impact Covid-19 may have had on employee welfare and are prepared to support their staff in this area,” he added.