Volatile 2020 for subcontracting

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The latest Contract Manufacturing Index showed that the subcontracting market was down 46% in the fourth quarter (Q4) of 2020 compared to the previous quarter. Year on year though the market barely moved, ending 2021 1% high than it ended 2020.

Those figures, though, conceal a volatile 12 months.  

A strong start to the year was followed by a dramatic fall at the start of the March lockdown. A strong recovery followed in the summer, with activity falling back again from September.

The CMI is produced by sourcing specialist Qimtek and reflects the total purchasing budget for outsourced manufacturing of companies looking to place business in any given month.

The strongest fall in Q4 was in fabrication – dropping from 58% of the total market to just 31% –   which appeared to be linked to a slowdown in construction. From being the most important sector in Q3, construction was down 71% in Q4.

The biggest sectors in Q4 were Industrial Machinery, Electronics, Heavy Vehicles/Construction Equipment and Medical/Scientific. Of these, only Heavy Vehicles/Construction Equipment and Medical/Scientific showed any significant increase in value.

Commenting on the figures, Qimtek owner Karl Wigart said: “Comparing the figures with previous years it looks very bleak but considering we were in lockdown for a quarter of the year it looks pretty good.

“Q4 was slow to start and did well in November but reverted to a slow December again, same as last year.

“A lot of projects are being slowed down for various reasons and the most common we hear of are communication, uncertainty and material and transport shortage.”

www.qimtek.co.uk

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