UK is better for manufacturing than the EU, say industry chiefs

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“With the UK Government’s increasingly supportive policies, businesses are recognising the UK as a competitive and inspiring place to operate.”

The majority of Britain’s manufacturers are now viewing the UK as a more competitive place to locate their activities, compared to just a third one year ago.

These findings come from Make UK and PwC’s Executive Survey 2024, published today, which polled more than two hundred senior manufacturing executives.

The Executive Survey 2024, finds that the UK’s manufacturers view the country as a more competitive place to operate than they did last year, with an increasing number believing that they are moving ahead of their European rivals.

It shows that after a very difficult few years through the pandemic and the shock to energy prices, there are optimistic signs with companies more bullish about the prospects for manufacturing in 2024. 

More than four-fifths believe that conditions in the sector will improve, with only one in five believing the contrary. While an increasing number also believe the UK is becoming more competitive than the EU.

As a result, manufacturers – who are now seeing opportunities outweigh the risks to their firms – are backing this belief with investment in new products, expansion into new markets and acceleration of the use of new digital technologies to improve their business. The adoption of the latter in particular is seen by 71.2% of firms as a way to boost operational efficiency, while more than half (52.2%) see generative AI increasing their workforces’ productivity.

Stephen Phipson Chief Executive at Make UK said:

“The last few years have been a rollercoaster of emotions for manufacturers, yet they have more than demonstrated their resilience time after time. We are now seeing some hope that conditions may be improving, amid a more supportive and stable policy environment, but this must be cemented within a long-term industrial strategy.

“While undoubted challenges remain, the accelerating use of digital technologies, our strength in innovation and expansion into new markets sets the scene for manufacturing to be at the heart of efforts to boost growth.”

Cara Haffrey, Leader of Manufacturing at PwC added:

“After what has been a rocky few years for manufacturers, it seems there is a cautious optimism in the air. In fact, our research showed that in the year ahead, more than half of them are planning to seize opportunities in new products, with more than a quarter (27.3%) hoping to explore uncharted territory, and expand into new markets.

“For many, despite January’s to-do list likely looming large, as the headwinds of sustained economic challenges, geopolitical instability, and steep employment and energy costs continue, the horizon seems brighter.”

The report states: “2023 felt like the year that the Government and political parties stood up and took notice of the manufacturing sector. This resulted in a landmark Autumn Statement for industry, with huge policy announcements for the sector, including permanent full expensing, the rollout of the Made Smarter programme and a fund to increase engineering apprenticeships.”

But it’s not just about the policies; there has also been a significant change in rhetoric from the Government around why “manufacturing is integral for growth. Manufacturing and productivity are intrinsically linked, with manufacturing accounting for 10% of GDP. If the goal is growth, then manufacturing must be prioritised.”

And this shows. As inflation fell to 4.6%, manufacturing outputs increased from £183 billion of output from the UK manufacturing sector to £224 billion of output (and core inflation is also now lower than half of the economies in the EU).

In fact, 44% of manufacturers expect improvements in the industry, with 30% of manufacturers predicting that disruption to supply chains will improve.

The report concludes: “As we enter 2024, UK manufacturing is experiencing a significant shift towards a brighter future. There is a newfound sense of optimism that supports the sector, fuelled by its resilience to economic shocks and commitment to innovation in the face of adversity. New tech and digitalisation no longer feel like they are out of reach for many manufacturers, but instead, present a way to raise their competitive edge. With the UK Government’s increasingly supportive policies, businesses are recognising the UK as a competitive and inspiring place to operate.”


Join the webinar on Tuesday 16th January to discuss manufacturers’ views on the year ahead. The panel will include Make UK, PwC, and member company Tees Components, chaired by Michael O’Dwyer, Chief UK Business Correspondent, Financial Times.

Sign up for free here >

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