Industrial Sector Still Has Plenty of Life Left; New Research by HSBC Commercial Banking Names Seven Cities Poised to Drive Manufacturing Growth and Job Creation over the Next Decade. Unfortunately, Birmingham Isn't One of Them. but Martin Guest, Managing Director of the Birmingham Office of CB Richard Ellis, Says Rising Demand for Industrial Space Suggests There Is Life in the Region's Manufacturing Sector Yet

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Byline: Martin Guest

The Midlands is the birthplace of industry, so HSBC's survey predicting a manufacturing renaissance should have made welcome reading around the region.

Regrettably, the research named seven cities that would drive the recovery - Bristol, Glasgow, Newcastle, London, Leeds, Brighton and Liverpool - but no mention of Birmingham.

The city's absence is striking, not least because some of our manufacturers have seen a significant upturn in their fortunes. For example, Jaguar Land Rover has staged a remarkable turnaround under Tata Motors, reporting record profits of more than pounds 1bn this year. The company has increased vehicle output by 26 per cent since its acquisition from Ford, with demand for parts trickling down its Midlands supply chain.

Looking at the manufacturing industry as a whole, although low levels of consumer confidence at home have impacted on the demand for products, the depreciation of the pound and low interest rates have compensated - much of Jaguar's success has been export driven, with increased demand from India and China in particular.

As a result, according to the manufacturers' organisation EEF's latest 'Manufacturing Outlook' survey, manufacturing has shown six consecutive quarters of growth. As a sector, manufacturing accounts for 13 per cent of the total economy. However, it is currently responsible for one quarter of growth. Further growth is set for 2012, with many manufacturers reporting their intentions to invest more in their businesses.

While there is no point in pretending that the picture is all rosy - manufacturing has undoubtedly been hard-hit during the recession and there are sectors which may never recover - Birmingham and the Midlands has not fared as badly as many pundits expected.

Many thought the collapse of MG Rover in 2005 sounded the death knell for the city and the region's car industry, but with MG's renaissance led by Shanghai Automotive Industry Corporation, the reversal of fortunes at Jaguar Land Rover, and now talk of China's stateowned car maker First Automobile Works opening a plant here, the automotive sector has proved more resilient than many anticipated.

As a property business, we have witnessed at first hand the rising demand for new space from manufacturers. In recent years, take-up has been dominated by retailers and third party logistics operators, but our industrial team is now reporting increased interest from manufacturers, particularly those supplying the car industry. …