Among the various manufacturing categories, the clothing sector saw one of the sharpest decline in sales. Small businesses have been particularly hard hit by the combination of softening sales and the high cost of goods and energy.

Despite these pressures, manufacturers found a minor reprieve in steadily shortening lead times. An anticipated supply chain crisis, expected due to conflict in the Red Sea shipping channels, did not materialise in Q1 2024. This was likely due to military intervention by the US, UK, and European nations, as per the Q1 2024 Manufacturing Health Index Report by Unleashed.

Having already reached a five-year low in Q4 2023, average lead times for small manufacturers fell further in Q1 2024, remaining well below 20 days in all regions. Shorter lead times have helped reduce cost pressures on manufacturers by lowering overall inventory requirements, which are typically the greatest cost in the goods-producing sector.

The adoption of e-commerce for business-to-business (B2B) sales has been growing steadily. The UK is leading this trend, with 34 per cent of firms using digital channels for B2B sales in Q1 2024. The trend is driven by several factors, including lower sales costs, a younger workforce expecting digital purchasing and sales experiences, and the ability to drive greater sales volumes online.

The shift towards digital sales channels is even more pronounced in the business-to-consumer (B2C) space. Manufacturing firms are increasingly looking to sell directly to consumers. As of Q1 2024, 68 per cent of UK firms sampled had used platforms such as Shopify, Amazon, or WooCommerce for online sales. This trend is driven by the need to increase sales volumes, reach new customers, overcome the challenges of securing listings in supermarkets or other chains, and create brand awareness online.

Fibre2Fashion News Desk (DP)