The survey of over two hundred senior manufacturing executives shows that after a very difficult few years through the pandemic and the shock to energy prices, there are optimistic signs with companies more optimistic about the prospects for manufacturing in 2024. Accordingly, most companies are seeing opportunities outweighing the risks to their business.
Manufacturers are backing this belief with investment in new products, expansion into new markets and accelerating use of new digital technologies to improve their business.
The survey also shows that manufacturers are wary of the prospects for both the UK and global economies, while challenges remain in the faces of increased energy and employment costs, as well as access to domestic skills.
In a statement, Stephen Phipson, chief executive of 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.”
According to the survey, 52.7 per cent of companies see the UK as a more competitive place to manufacture. This compares to 31 per cent in the same survey a year ago following the political chaos of 2022. Less than a fifth (16.6 per cent) believe the UK is not a competitive place in which to manufacture.
Furthermore, almost a third of companies believe the UK is increasing its competitiveness against Germany and France (30.7 per cent and 30.2 per cent respectively), while over a quarter believe the UK is moving ahead of Spain and Italy (29.3 per cent and 28.3 per cent).
By contrast, the share of companies who believe the UK is losing competitiveness against the US, India and China overshadows those who believe the UK is gaining.
The survey also shows manufacturers are confident about their prospects for the coming year, with 44.4 per cent believing that conditions in the sector will improve, while 20.5 per cent see conditions deteriorating. In addition, 62 per cent of companies see opportunities outweighing the risks this year, while 14 per cent disagree.
In total, 41.5 per cent see the UK economy deteriorating in 2024 compared to 36.6 per cent who see it improving. A similar proportion (37.6 per cent) see the global economy getting worse this year compared to 31.2 per cent who see it improving.
In the year ahead, 52.7 per cent of manufacturers see opportunities in new products, while 27.3 per cent are expanding into new markets, and a similar proportion (26.3 per cent) are net zero opportunities. Furthermore, digital technologies have the potential to boost productivity, with 71.2 per cent believing digitising operations will boost operational efficiency. 52.2 per cent see generative AI increasing the productivity of their workforce.
However, 53.2 per cent still see risks from increased energy costs, followed by the impact of political instability (43.9 per cent). Over two-thirds (36.1 per cent) are still seeing supply chain disruption, while 35.1 per cent see lack of access to domestic skills as a risk.
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