The survey shows that almost half of companies have redesigned products or processes in response to rising materials prices and 40% admitted to substituting some inputs with cheaper alternatives. Nearly two-thirds of companies have sought different sourcing options with just over 4 in 10 looking to renegotiate existing contracts with customers.

EEF director for Yorkshire and Humber Andy Tuscher said: “This is a stark illustration of the impact of high material costs which manufacturers have been grappling with throughout the recovery. However, whilst most attention is focused on the inflationary aspects of these costs, the flipside is another story of the extent to which companies are finding innovative solutions to deal with them.

“What is clear from our survey is that there is not a simple equation for managing rising and volatile materials costs. Manufacturers have so far deftly navigated the issue using the internal tools available and being agile in managing customer relations and procurement strategies. And this is an issue that companies are saying they will be keeping a close eye on in the months ahead.”

The survey suggests that commodity prices are likely to remain volatile and that most manufacturers will be forced to build further price increases into their business plans.

Read the full survey here >>

According to the report, both input and new business increased strongly during the month with new orders growth the fastest since April 2004.

Phil Hawker, area director for Lloyds TSB Commercial in Yorkshire, said: “The Yorkshire and Humber private sector continued to grow strongly in March and the average rate of output growth in the first three months of 2011 was the fastest for any quarter since the fourth quarter of 1999.

“Firms attributed this latest expansion to greater new business volumes, which rose at the strongest pace in almost seven years. And the number of people employed in the region’s private sector grew for the tenth consecutive month.”

But he warned that greater cost burdens might weaken profitability and restrict future activity growth.

The regional figures underline the latest Manufacturing Outlook survey from the manufacturers’ organisation EEF and BDO LLP which credits Britain’s manufacturers with continuing to drive the UK’s economic recovery by taking advantage of export-led demand which shows no signs of abating..

According to the survey, the positive responses on output and orders over the past three months have contributed to the strongest four-quarter period in the survey’s history. As a consequence, investment and recruitment intentions are at record levels.

However, EEF also warns that behind the overall recovery picture, there is growing uncertainty about the location and scale of these capital investment plans which are critical to sustaining growth and competitiveness. The survey shows that caution around the durability of the recovery and the cost of finance, particularly for smaller companies, are also preventing solid demand from translating into a recovery in investment.

Furthermore, in line with other recent evidence, the survey shows more manufacturers have reached the limit of their ability to absorb further cost increase with a balance of 26% of companies increasing their prices over the past three months. With few signs that the acceleration in commodity price increases will slow, the balance expecting to raise prices in the home market in the next three months has increased to 39% with manufacturers also expecting to see a corresponding improvement in margins.

Job vacancies now stand at 244,000 – 2000 up on the previous three months, says the report, with energy leading the growth in vacancies and an increasing number of opportunities in retail and manufacturing.

Working Links’ regional employer solutions manager Jason O’Neill said: “We saw a lot of activity in the run up to the busy Christmas period in terms of vacancies, especially in the retail sector. But it’s very good to also see manufacturing industry picking up again.”

Meanwhile, a survey for the Chartered Institute of Purchasing and Supply, shows that British manufacturing ended 2010 on a high, with activity reaching its highest level for 16-years.

The closely watched monthly survey showed the manufacturing index rising to 58.3 in December from 57.5 in November, far ahead of economists’ forecasts.

This is the highest level since September 1994 with favorable exchange rates and strong economic performance of the UK’s main trading partners – Germany and the US – driving demand for UK manufactured goods.

The news prompted Victoria Derbyshire to host a live phone-in on BBC Radio 5  in which she speaks to successful manufacturers across the country, learns what a grommet is and that yes, amazingly, we still make things in this country!

“Never before has there been more reason to buy British and from within the region. The growth of the economy and future job creation could be given a massive boost by even a small increase in the percentage of goods sourced here,” says Andrew Palmer, regional director of the CBI.

Experts argue that the weak pound, high freight charges and carbon reduction incentives make shortening supply chains by sourcing components locally makes sound business sense.

Gary Williamson, chief executive of Leeds, York and North Yorkshire Chamber of Commerce commented:  “While we can never be self-sufficient, we tend to forget that businesses here manufacture a huge range of products and if we all look to source closer to home we will create jobs, reduce carbon emissions and keep more of our money flowing around the UK economy.”

David Raistrick, national head of manufacturing, Deloitte, adds:  “With the UK the sixth largest manufacturing base in the world it has never made more sense for Yorkshire firms to buy locally.”

Read the full story here

This follows recent news of Leeds textile manufacturer Hainsworth racking up a £1 million order for China’s booming piano manufacturing industry and expanding pool and snooker markets.

And possibly a little tongue in cheek, Skopes’ commercial manager Malcolm Campbell is considering a fabric with a small amount of wolf hair, branded: “A wolf in sheep’s clothing: Are you man enough?”

He believes macho young Americans would beat a path to Leeds for this sort of gear!

The move is based on a Europe-wide survey that revealed 70% of UK shoppers want more glass packaging and, quite apart from protecting valuable jobs in our region, makes a good deal of sense.

Clearly, glass has nothing to hide and is made from sustainable materials in modern, environmentally conscious plants across Yorkshire. Some 80% of UK consumers trust glass to protect food and drink against chemicals – some chemicals found in non-glass packaging continue to concern health experts and have been banned in some European countries for use in children’s food and drink containers.

Leeds and the City Region are home to five glass packaging manufacturing plants with a further two based in South Yorkshire.

Multi award-winning Allied Glass has sites in the city and Knottingley and an impressive history stretching back to the end of the 19^th Century. Recent innovations have included production of a 1 litre bottle weighing in at less than 400 grams. With stylish packaging for brands ranging from The Famous Grouse to Bombay Sapphire and Smirnoff, Allied’s: “Trusted by the world’s leading brands,” is no idle boast.

So, if you want to see things more clearly, stay healthy and protect regional jobs, ask for glass!

 The EEF forecasts manufacturing growth of 3.7% this year and 3.2% in 2011, driven by the strength of overseas markets.

The Engineering Employers Federation and accountants BDO LLP report that manufacturing firms outperformed expectations this year but face greater global uncertainty and financial market volatility ahead.

The sector is predicted to outstrip the rest of the economy, growing by 3.8% this year and dipping to 3.4% in 2011.

Meanwhile, the CBI reports that smaller manufacturers face a difficult quarter as demand fuelled by companies rebuilding stocks of goods weakens. But in the past three months, 41% of sme manufacturers saw output rise, with 20% producing less – the best figures for 15 years. Exports were particularly strong, with 22% of companies reporting a rise in volume.

More Hours

It may, therefore, be no coincidence to learn that workers are beginning to put in more hours. Many people opted for shorter hours to avoid job losses in the recession, says the Chartered Institute of Personnel & Development, resulting in a fall of 32 million hours worked each week. The number has now started to increase, indicating a modest pick-up in demand for workers.

According to Lord Jones, action is urgently required to ensure continued investment and maintain skills levels if the sector is to be sustainable in the long term. He argues that all efforts should be made to avoid iconic brands such as JCB from becoming British-based companies simply assembling parts made in other parts of the world.

In 1979 96% of JCB components were UK sourced, but this has now shrunk to 36%. While the highly successful company strives to source as many parts as it could locally, this was declining because the supplying firms were no longer in existence. If this was allowed to continue , Lord Jones fears that UK manufacturing industry might decline altogether, leaving companies like JCB British in name only.