British manufacturers are beginning to win back work that has for the last ten years been sourced in China.
The reason is that Oriental costs have risen, transport charges have escalated, and the pound sterling has fallen. This, coupled with question marks about consistency of quality, has created opportunities.
This is great news for Midland manufacturers. We’ve had lean times for some years and many good firms have fallen by the wayside.
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However, expanding order books require additional funds to finance the more work.
Despite Government claims, money from lenders is just not getting through. Some firms are finding great difficulties with cash flow, especially as many customers are taking longer to pay.
It’s a ridiculous situation for manufacturers. Orders are being won, there is plenty of plant available to handle the business, yet lack of cash is preventing this work being processed, and of course, precluding recruitment.
This current situation could be an ideal time for business angels, and those with spare cash in the bank, to come forward.
The manner in which the EEC dealt with Cyprus, and the fact that they let it be known that the same template would be used for other members with similar problems, should be a wake-up call to people with cash over £85,000 in any given bank.
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Our Government has said that it would be very unlikely for it to take similar action with our debt mountain, but no politician will rule it out altogether.
Money lying in the bank is losing value as inflation outstrips the meagre returns achieved.
It would make sense to invest spare capital in projects that would currently give a return of anything from four to five per cent, or more, long term if an equity stake was acquired.
The lesson to be learned from the Cyprus fiasco is that a precedent has been set, and without doubt, other Governments will follow if driven into a tight corner.
To have heaps of cash just lying in a bank is no longer a good idea. Depositors have to remember that it is not just depositing for safe-keeping, it has to be regarded as an investment, and as such, there is risk attached as so many, now poorer, Cypriots and Russians have discovered.
* Russell Luckock is chairman of Birmingham pressings firm AE Harris