Resources worry manufacturers

The cost of raw materials is going to be the biggest constraint on UK manufacturing according to the Grant Thornton International Business Report on Manufacturing.



The annual report, which surveys manufacturing business owners and senior managers in 32 countries, revealed that 47 per cent of respondents thought the cost of raw materials would have the biggest impact on their business. Staff costs at 23 per cent and energy costs at 18 per cent were the next biggest factors.



In the UK, 38 per cent thought raw materials were the main factor affecting costs followed by staff and energy costs at 28 and 23 per cent respectively.



‘Supply chain management is now top of the agenda, with UK manufacturers exploring far more options to secure a cost effective and reliable flow of raw materials for their operations.’ said Bob Hale, head of manufacturing at Great Thornton.



Hale also said the concern over energy costs was almost completely down to oil prices hovering around the $100 a barrel mark.



Despite these worries, 58 per cent of UK manufacturers are positive about their prospects and only 15 per cent predict a tougher year ahead.



The report also revealed that even though the UK was fourth in the world in terms of reviewing energy consumption, less than half (48 per cent) had invested in energy saving plant equipment or machinery.



‘This level of investment is disappointing when you consider the government’s ongoing focus on curbing emissions through an increased legislative burden,’ added Hale. ‘An investment now may save a great deal for manufacturers in the future should successive governments increase the pressure on UK businesses to comply with more rigid restrictions.’