Britain’s manufacturing firms are optimistic that conditions will improve for the sector this year and expect productivity to rise despite key risks around escalating pressure on input costs and difficulty accessing domestic labour and skills, a new survey shows.
The 2022 Make UK / PwC Senior Executive survey indicates that, for more than half of companies, the biggest challenges facing them have changed in the last twelve months with two thirds stating that Brexit had moderately or significantly hampered their business.
However 73% believe opportunities for their business will outweigh risks over the next year. “It’s testament to the strength of manufacturers that they have emerged from the turbulence of the last couple of years in such a relatively strong position,” said Make UK chief executive Stephen Phipson.
“While clouds remain on the horizon in the form of rapidly escalating costs and access to key skills, the outlook is more positive for those that remain adaptable, agile and innovative.”
Strategies manufacturers are adopting to build resilience and agility into their business involve looking at their supply chains and investing in people, innovation and green technologies.
Up-skilling or retaining existing staff was named as a priority for the next 12 months by around two thirds of respondents (67%) followed by new product development (60%) and investment in capital equipment (54%).
Just under half of manufacturers are planning investments in green technologies or energy efficiency measures in 2022 – with a third saying this spending has increased – while 45% have made concrete plans to invest in automation, artificial intelligence, additive manufacturing or other forms of digital technologies.
Meanwhile, almost four in five manufacturing businesses (78%) envisage a significant or moderate increase in their productivity this year, the survey shows.
“We are particularly pleased by the breadth of net zero ambitions reflected in the report,” commented PwC’s UK industrial manufacturing and automotive leader Cara Haffey. “Across the UK we’re seeing an increasing number of businesses underpin their environmental, social and governance strategies with practical applications to decarbonise their operations and ambitions to build out their green skill base through the recruitment of ‘green’ jobs.”
Make UK has forecasted that manufacturing grew +6.9% in 2021 and is predicting growth in 2022 of +3.3%.