Industrial machinery manufacturers saw sales and purchasing falling and lead times starting to creep up in the last quarter of 2024 according to a report from inventory management software provider Unleashed.
The report says small and mid-sized firms saw their average sales revenue drop by 45% in the final quarter of last year, from just over £487,000 to nearly £271,000. The number of purchase orders (POs) placed also fell by nearly half from 624 to 327, while lead times were slightly up, from 18 days to 19.
The research also shows that sales revenues and POs were down by almost 20% compared to the same period last year.
Unleashed says across all the categories, average sales revenue dropped by more than 40% in the final quarter of last year, from £468,215 to £275,953. The number of purchase orders (POs) placed also fell by nearly half, from 322 to 167.
Sales revenues were down by almost 22% compared to the same period last year, and POs by nearly 18%.
Suppliers in the energy and chemicals market were hit hardest, seeing the sharpest decline in both sales revenue and POs of any manufacturing category. Quarter-on-quarter sales revenue was down by 63% from £587,148 to £219,024, while POs dropped by 64% from 339 to 121.
Joe Llewellyn, GM of ERP Small Business at The Access Group, the parent company of Unleashed, said:“Low business confidence and newly-volatile international trading conditions seem to be taking their toll on manufacturers across almost every category we looked at – which made it a tough start to the year for many businesses.
“While many will be rightly concerned about this drop-off, it’s worth bearing in mind that Q3 2024 was a bumper quarter, when we saw both sales revenue and POs surge. That suggests performance is returning to more normal levels, albeit a little more subdued than we’d all like to see.
“The figures also suggest that manufacturers are keeping a tight rein on their inventory, with excess stock significantly down, and a corresponding rise in its profitability (GMROI). While market conditions have impacted sales and orders, they’re controlling what they can, enabling them to weather the storm and make the most of the recovery.”
Total sales for 2024 were however up compared to 2023, showing an overall more positive direction of travel, says Unleashed.
