Analysis shows that UK electronics and telecommunication manufacturers are starting the year on a strong footing after seeing their profitability improve over the key Christmas quarter.

Mid-sized firms in the sector have benefitted from demand for products and stabilising supply chains, according to the latest Manufacturers’ Health Index, compiled quarterly by inventory management software brand Unleashed, part of the Access Group.

The report reveals data on GMROI (gross margin return on inventory) – a measure of the profits made on inventory costs – across 16 manufacturing categories. Manufacturers were also surveyed to gain first-hand insights into the specific challenges and opportunities they face.

Electronics manufacturers made an average of £2.69 (€3.14) for every pound invested in inventory, up from £1.54 the previous quarter. The sector saw significant growth in comparison to Q4 2022 – when it achieved £1.30 GMROI. It remains almost level with electrical manufacturers who achieved £2.68 GMROI in Q4 2023 – up from £1.85 in the previous quarter.

Jarrod Adam, Head of Product, at Unleashed, said:  “Electronics manufacturers saw profitability increase at the end of 2023, with an impressive improvement in the final quarter. Overall, the businesses we surveyed across different manufacturing categories were optimistic about 2024, with almost three-quarters saying they expect demand to grow this year.”

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