Industrial Strategy fosters confidence for UK manufacturing - survey

The findings are from the annual Make UK/PwC Senior Executive survey, which asked 161 senior manufacturing executives about the opportunities, risks and challenges for their business in the year ahead.

As well as the benefits from an industrial strategy, the survey shows that despite headwinds associated with rising costs, most manufacturers believe that the UK remains competitive and the opportunities for their business in 2025 outweigh current risks.

Consequently, manufacturers are backing their belief in the UK as a place to manufacture with an emphasis on developing new products, entering new markets and upskilling and retraining staff. The survey also gives credibility to the view of some economists that companies will counter the impact of increased costs by investing in new technologies and automation to improve their efficiency.

Following the recent consultation, Make UK is now urging government to set out in detail the full proposals of a formal long term industrial strategy.

In a statement, Stephen Phipson, chief executive of Make UK, said: “Manufacturers have demonstrated their resilience over and over again in recent years and, despite the numerous challenges they face, those that remain innovative and are prepared to invest in new technologies, expanding markets and, most crucially, their people will continue to thrive. But they can only do this if they are operating in the most favourable business environment, and there is little doubt that the next twelve months are set to be immensely challenging in a complex international environment.  

“To help companies navigate a way through these challenges it is now vital that government sets out as a matter of urgency the immediate and significant priorities as part of its formal industrial strategy given the very clear benefits manufacturers believe this will bring. By doing this, it will help re-boot business confidence and ensure the year gets off on a positive footing in terms of the relationship between industry and government.”

The survey found 57 per cent of respondents saying they will increase investment in response to a long-term industrial strategy. In addition, 43 per cent of companies believe such a strategy will lead to increased productivity and 42 per cent said it will help them secure the skills they need for the future.

The survey also found that 49 per cent of companies believe the UK remains a competitive place to manufacture compared to a quarter who disagree. In addition, 63 per cent believe the opportunities for their business in 2025 outweigh the risks compared to 14 per cent who disagree.

Companies are responding to these challenges and opportunities by focusing on growth strategies, with 78 per cent of companies developing new products, almost half deploying new technologies and 37 per cent planning to enter new markets.

Despite these positive intentions, many companies think the UK economy will deteriorate in 2025 (34 per cent) as improve (37 per cent). Furthermore, 92 per cent believe their employment costs will increase, 76 per cent think the costs from other business taxes will increase and 72 per cent expect their logistics and transport costs to increase.

In response, Make UK is urging government to look at measures to mitigate these increases by reducing business rates and introduce measures and incentives to aid decarbonisation and energy efficiency.