M&A shows signs of a brighter day
News of big name acquisitions in the manufacturing sector so far this year are a sure sign of returning market confidence. Recent months have seen Koch Industries acquiring Hamworthy Combustion Engineering, Colfax Corporation purchasing Charter International and plenty of market chatter relating to other industrial players.
For me, this shows that the top end of the sector is in robust health. People are quietly confident in their business and in expansive mood. These large corporates are turning to international acquisitions as they look to increase the pace of growth. For those UK companies who still retain a largely domestically focussed business the opportunities are more limited, with many still facing a tough time.
WHAT THE SURVEYS SAY
It's steady as she goes for UK manufacturing according to the latest business data. Industry barometer the PMI Index fell 0.8 points to 51.2 in February. But crucially the index remains above the 50 benchmark indicative of manufacturing growth.
Production and employment were on the rise according to the data published by Markit and the Chartered Institute of Purchasing and Supply. However, the sector faced some stiff "headwinds" according to analysts with a stagnation in new orders from domestic and international clients. Rob Dobson, senior economist at Markit said: "If this combination of rising costs and weak demand persists, sustaining output growth and job creation will become increasingly difficult."
The survey data showed input prices on the rise. Manufacturers reported higher prices for chemicals, feedstocks, metals, oils, plastics and transport, the Markit data reveals.
The mixed picture was echoed by Office for National Statistics (ONS) research. While manufacturing was growing the rate of growth remained pedestrian according to the ONS output figures. Manufacturing production increased just 0.1% below the 0.3% analysts had hoped for.
Barclays funding helps building manufacturers merge
Barclays has funded the merger of two leading building product manufacturers.
Epwin Group, manufacturer of low maintenance building products, has joined forces with Latium to create Epwin Holdings.
The new group has a combined turnover of £275m and over 2,500 employees.
Jim Rawson, chairman, Epwin Holdings said: "This represents a tremendous opportunity. The business groupings complement each other on many levels and the merger creates huge opportunities for our customers, staff and suppliers to benefit from the further development of a broad-based stable and financially secure group."
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