According to data published today by industry body Make UK in the latest quarterly Make UK / BOD manufacturing output report, Britain’s manufacturers are battening down the hatches amid a sharp slowdown in activity.
Based on a survey of 336 companies carried out during August, the survey results point to a decline in output and orders and a slowdown in recruitment activity.
As a result of the findings Make UK - which represents 20,000 companies across the UK - has cut its manufacturing growth forecast for 2023 to -0.5% and is now forecasting just 0.5% growth for 2024.
Many respondents place at least some of the blame on global and domestic policy decisions. For instance, three quarters of companies (72.7%) believe that policy incentives elsewhere (e.g. US Inflation Reduction Act and similar EU measures) are making UK investments harder to justify, while a similar number (74.1%) say a lack of policy consistency in the UK is damaging efforts to build a consistent business environment. More than half of companies have withheld investment in the last two years as a result of the uncertain business environment, whilst just over half says they would have invested more in the last five years or, in the future, if there was a formal industrial strategy in place.
In response, Make UK is calling on the Chancellor to use his limited resource to target measures on skills, digitalisation and productivity and energy efficiency. Specific priorities identified include a review of the apprenticeship levy, an extension to business rate relief for green plant machinery, a UK-wide commitment to Made Smarter, and an expansion of R&D tax relief to include capital equipment relating to industrial decarbonisation.
Commenting on the findings Verity Davidge, Policy Director at Make UK, said: “Manufacturers are seeing a very sharp slowdown in activity as the potent cocktail of rising interest rates, cost of living and slowing overseas markets bites hard. While it’s clear the Chancellor doesn’t have a financial war chest to help boost growth he should use his Autumn Statement to bring forward carefully targeted measures which could make a difference to companies’ efforts to boost skills and productivity.”