Hitachi Rail UK investments in North East reach £110mn
Latest announcements made by Hitachi Rail, reports that its investments at its UK, County Durham factory has reached £110mn. Recent investments made in the factory - £8.5mn - have allowed the company to complete the construction of new facilities for welding and painting of UK passenger trains to begin.
“It is fitting that Hitachi Rail are building the next generation of intercity trains in County Durham, a place with a proud and illustrious railway heritage. Their long-term commitment and continued investment in the North East is a major boost for jobs and skills, driving economic growth and helping level up our country as we build back better from the pandemic,” commented , Grant Shapps, MP, Transport Secretary.
Hitachi Rail, new facilities at County Durham
Developing the next generation of intercity trains for East Midlands Railway and Avanti West Coast, 40 staff and newly graduated welders and painters will use the new bespoke facilities to complete the high-tech aluminium carriage shells.
Investing in high value aspects of manufacturing will help Hitachi Rail to further its long term commitments to the region, marking the first time in decades that a new train welding facility has been developed in Britain.
By investing in the creation of its new facilities, Hitachi Rail has also been conducting an extensive upskilling programme for its staff and apprentices which includes an eight week initial training programme for a welding certification, with further training for additional specialist qualifications.
“The £110 million we have now invested at Newton Aycliffe is not only a sign of our continued commitment to the North East of England but also British manufacturing and its supply chain. At the heart of our commitment is the continued development of a highly skilled and dynamic workforce, which through our South Durham Technical University College partnership and 70 apprenticeships will drive the rail industry forward at home and abroad for many years to come,” added Jim Brewin, Head of UK & Ireland, Hitachi Rail.
Establishing its County Durham manufacturing base in 2015, Hitachi Rail has been tasked with building 122 pioneering trains - as part of the government's Intercity Express Programme - alongside 70 zero-emission Class 385 regional trains for Scotland. Since then, Hitachi Rail has been working to localise its supply chain in the UK.
"This investment by Hitachi Rail is another statement of their ongoing efforts to localise skills and supply, creating new roles and opportunities to level up the North East. Their ongoing work with the University Technical College and investment in apprentices is a huge credit to them and my constituents. It’s developing real career opportunities for young people in my area and I look forward to supporting them in their journey forward,” concluded Paul Howell MP, Member of Parliament for Sedgefield.
IHS Markit/CIPS: UK Manufacturing PMI near-record high
UK manufacturing trends
For the UK manufacturing sector, growth of output and new orders were both reported by IHS Markit and CIPS as among the best seen over the past seven years, which in turn has led to a strong increase in employment. Despite this, the sector continues to face supply chain delays and input shortages, which resulted in increased purchasing costs and record selling price inflation.
UK Manufacturing IHS Markit/CIPS Purchasing Managers’ Index® (PMI®)
Seasonally adjusted, IHS Markit/CIPS Purchasing Managers’ Index® (PMI®) rose to 60.9 in April, which was an increase compared to March (58.9) and above the estimated 60.7 for April.
Increasing for the eleventh consecutive month, the latest readings are the highest since July 1994 (61.0). The output growth for April has been attributed to the loosening of lockdown restrictions, improving demands and a rise in backlogged work.
“The manufacturing sector was flooded with optimism in April as the PMI rose to its highest level since July 1994, bolstered by strong levels of new orders and the end of lockdown restrictions opened the gates to business. It was primarily the home market that fuelled this upsurge in activity though more work from the US, Europe and China demonstrated there were also improvements in the global economy. This boom largely benefited corporates as output growth at small-scale producers continued to lag behind,” said Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply.
In addition to expanding production, total new orders rose for its third consecutive month, which was attributed to a revival of domestic market conditions, stronger client confidence, parts of the economy reopening and improving global market conditions.
While new exports rose in April, the rate was reported as weaker in comparison to new orders. “Companies reported improved new work intakes from several trading partners, including mainland Europe, the US, China and South-East Asia. Large-sized manufacturers saw a substantial expansion in new export order intakes, compared to only a marginal rise at small-sized firms,” said IHS Markit/CIPS.
UK Manufacturing’s outlook
Remaining positive at the start of the second quarter, 66% of companies forecast that output will be higher in a year's time, which is attributed to expectations for less disruption related to COVID-19 and Brexit, economic recovery, improved client confidence and new product launches.
“Further loosening of COVID-19 restrictions at home and abroad led to another marked growth spurt at UK factories. The headline PMI rose to a near 27-year high, as output and new orders expanded at increased rates. The outlook for the sector is also increasingly positive, with two-thirds of manufacturers expecting output to be higher in one year’s time. Export growth remains relatively subdued, however, as small manufacturers struggle to export,” said Rob Dobson, Director at IHS Markit.
Adding to comments from IHS Markit and CIPS, , Managing Director of Freight and Logistics at Accenture Global said: “While today’s figures are positive overall, the worsening supply situation is still a concern, with rates of both input costs and selling price inflation running far above anything previously seen. Shipping delays and material shortages are driving huge backlogs of uncompleted work and the surge in manufacturing orders is leading to many firms struggling to boost operating capacity to keep up with demand. With business expectations becoming even more optimistic as the economy rebounds, the big question will be whether firms will be able to cope with the surging inflows of new orders.
“As ongoing supply chain issues are still at large, companies with wide international footprints should look to reassess their logistics strategies by running supply chain stress tests and simulations in order to respond quickly to upswings and variability in demand. A flexible and resilient supply chain will be a key way for businesses to remain both competitive and stable as we emerge from the pandemic”