While the contents of the latest AGCC Quarterly Economic Survey didn't surprise many people, it nonetheless remains a source of worry for every business owner in the region.
77% cite taxation as their biggest concern. 46% expect profits to decline. Sales and orders at pandemic lows. These aren't just statistics - they're real businesses, real people, and real anxiety about the future.
But here's what struck me most: while we can't control taxes, market conditions, or government policy, we're losing a fortune on things we CAN control – and most businesses don't even see it happening.
The hidden costs nobody's counting
I've been working within manufacturing for two decades and in my work as a continuous improvement specialist, I see the same pattern repeatedly. Businesses are so focused on external pressures – and rightly so – that they miss the internal waste quietly eroding their margins every single day.
The recurring quality issue that costs £5K in rework every month. The two hours your leadership team spends firefighting the same problems weekly. The brilliant operator who spots inefficiencies daily but doesn't feel empowered to fix them.
That's not a process problem. That's a profitability problem.
And when 82% of North-east firms say labour costs are their biggest pricing pressure, we can't afford to waste the value of the workforce we're already paying for.
What the survivors do differently
I've noticed something about the businesses who thrive in tough times: they don't wait for conditions to improve. They take control of what they can control.
They intentionally and systematically eliminate waste. They empower their people to solve problems at source. They build improvement into how work happens, not as a separate initiative that fades after the kick-off meeting.
These aren't the businesses with the biggest budgets or the most resources. They're the ones who recognize that when you can't reduce taxes or wage costs, you MUST maximize operational efficiency. There is a reason why most big organisations invest in operational excellence!
It's not about working harder
The survey shows 75% of businesses struggled to recruit. But I would also ask how many good people are we losing because they don't feel heard or valued?
When frontline workers see problems but can't fix them, when their knowledge stays trapped in their heads, when the same issues get solved over and over – that's not just frustrating, it's expensive.
Continuous improvement isn't about squeezing more from exhausted people. It's about creating the conditions where the expertise already on your payroll can actually flow, where problems get solved by the people who see them, and where small improvements happen daily.
The results are time savings for leadership, cost savings from eliminated waste, better retention because people feel their contribution matters.
Control what you can control
We can't change what the Chancellor announces next month. We can't force customers to increase orders. We can't stop wages from rising.
But we can stop paying for the same problems repeatedly. We can unlock the potential sitting untapped in our workforce. We can build operational resilience that protects margins regardless of external conditions.
The AGCC survey tells us 46% expect profits to decline. I refuse to believe that has to include your business.
The manufacturers who will buck that trend aren't hoping for better conditions. They're creating better operations. And they're doing it now, not waiting for the perfect moment.
A way forward
If you're reading this and thinking "this is exactly where we are," you're not alone. The survey proves that. But you don't have to stay there.
During times of turbulence and change, it is empowering to remember that you still have choices, and that there are still things under your control.
Small operational improvements compound into competitive advantage. Empowering your people creates both cost savings and better retention. Building a culture of continuous improvement means you're not dependent on any single initiative or consultant – the capability lives within your team.
That's what Finding Your Way means. Not waiting for rescue from government policy or market recovery but taking control of what you can control and building from there.
The data is sobering. But it's also a call to action.
What will you do with it?
Diana Gormley is managing director of Danu Solutions, working with SME manufacturers across the North-east to unlock operational efficiency and cost savings through people-centered continuous improvement. If you'd like to discuss how to protect your margins and empower your team, contact Diana at info@danusolutions.co.uk or visit www.danusolutions.co.uk