In previous years, The Engineer’s annual Business Confidence survey has often opened with a hopeful prediction that whatever global hiccup has dented progress over the past 12 months [Covid, Ukraine, etc., take your pick] will soon be in the rear-view mirror and we shouldn’t give up anticipating a return to more settled times.
But with the conflict in the Middle East showing little sign of settling; tensions between the West and Russia ratcheting up on a weekly basis; and a second Trump presidency about to commence, it’s probably time to revise this analysis. Indeed, it’s pretty clear that if anything is in the rear-view mirror as we move into 2025, it’s a world of certainty and predictability.
With that in mind, we awaited the results of this year’s survey with some trepidation, fearing that the resilience, optimism and positivity displayed in earlier years may finally have given way to a more pessimistic view of the future. Gratifyingly, it seems we needn’t have worried.
Carried out during November 2024, and based on responses from 185 respondents from a range of different sectors, this year’s survey reveals a sector which - despite facing challenges - hasn’t lost its passion to innovate or determination to improve and succeed.
As always, we asked our readers - drawn from across industry - to tell us how they are feeling about the year ahead, what technology areas and sectors they expect to dominate, and how they expect their own organisations to perform.
As in previous years the largest single response group (20 per cent of respondents) is from manufacturing, with the next largest sample groups from the aerospace sector (10 per cent), the electronics sector (nine per cent) and the automotive and defence sectors (which each account for seven per cent of the overall response group)
By comparing this year’s results with those of our last business confidence survey (carried out in November 2022 and published in December 2022) we’re also able gauge whether confidence levels have improved or declined over the past two years.
CONFIDENCE SNAPSHOT
Despite the spiralling levels of global uncertainty engineers have lost none of their bullish optimism and enthusiasm. Indeed, in a continuation of the trend identified by our 2022 report, engineers appear to be in a generally in a positive frame of mind, with 64 per cent of respondents telling us that they are confident about the prospects for their businesses over the next 12 months. This actually marks an increase on our 2022 figure of 57 per cent, suggesting that despite lingering global uncertainty, industry’s inherent optimism is undimmed.
Directly echoing our 2022 survey, 31 per cent of respondents tell us that they are uncertain about what the year ahead holds, however the proportion of respondents who report feeling actively concerned and worried about the future appears to have dropped from 12 per cent in 2022 to just five per cent in this latest study.
Asked to identify the drivers for their views on the year ahead, respondents offer a range of perspectives. Those at the positive end of the spectrum cite strong order books, the opportunities created by the growing momentum behind decarbonization and a less chaotic UK government as reasons to be relatively cheerful. Whilst those viewing the months ahead with more trepidation point to the global security picture and continuing difficulty finding the skilled people as their main causes for concern.
Asked to identify the sectors which they think are likely to perform most strongly in the year ahead, respondents singled out defence and renewable energy as the ones to watch: an unsurprising view given both the continuing hostilities in Ukraine and the Middle East and the increasing momentum behind the push for net zero.
Industry Trends
Building on this, respondents ranked the push for net zero and the growing importance of energy efficiency as the two key trends that they believe will have the biggest impact on industry and their businesses in the year ahead.
As The Engineer’s regular coverage - and indeed many of the articles in this supplement attest - decarbonisation is now the major driver of innovation across most engineering sectors, and it’s not surprising to see it moving into the priority slot for respondents
The push for low carbon is closely followed by another pair of trends which feature heavily in this supplement - digitalisation, and automation - areas of expertise that, as we report, are absolutely absolutely key to driving energy efficiency and delivering on some of those broader low carbon ambitions.
Technology
This year’s survey also asked respondents for their views on some of the more specific technology areas which they expect to have a big impact throughout 2025 and unsurprisingly - given the huge amounts of hype surrounding the topic - AI and Machine learning topped the list (this was closely followed by Cybersecurity, a growing concern given the well-documented risks posed by Russia).
Despite the level of interest in AI just 40 per cent of respondents say they are currently using it within their businesses. However, around a third of those not currently using it, are planning to do so over the course of the next year.
Those using AI within their businesses are exploring a range of applications, with the use of generative AI tools to write reports and check documents the most widely reported use case. Other commonly cited applications include the use of AI to assist with coding, and the deployment of machine learning to automate some processes.
Those not using AI cite a mistrust of the technology and a lack of vision at senior management level as the prime impediments to adoption, whilst those planning on using it say they expect it to improve efficiency and productivity.
Investment and challenges
Finally, we also asked respondents whether they expect to see an increase of investment in research and development (R&D) and new product development (NPD) within their own organisations.
As with our 2022 survey just over 50 per cent of the response group expect investment in these areas to remain unchanged in the next twelve months. Encouragingly however, the proportion of those expecting to see an increase has risen from 25 per cent to 36 per cent, whilst the sample size of those anticipating cuts has dropped.
Asked to rank the key business challenges they expect to face during 2023, respondents identify access to skills as the number one challenge, followed by continuing problems cause by supply chain disruption and ever increasing energy costs.
The Engineer's 2025 Business Confidence Survey was carried out in partnership with Dassault Systèmes
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