MANUFACTURING OUTLOOK MAKE UK EXPERT VIEWS
Time
to rebuild
After the storm of 2020, 2021 will be a chance for manufacturers to
begin their recovery – even if Brexit gets in the way
Stephen Phipson, chief executive, Make UK
This year begins against the backdrop of an
unprecedented year which has shaken the
global economy to its core. Domestically
by now the UK will have fully completed its
exit from the European Union – even if, at
the time of writing, the prospects for
a trade deal remain on a knife edge. The
Chancellor’s Spending Review back in
November was delivered against a truly
unprecedented backdrop with the
worst fall in economic output since the
statistics were first collected 300 years
ago. In view of this, industry would
have had little expectation in the face
of a realistic statement which laid bare
the immense challenges the Chancellor
and the economy faces in the near term.
It is absolutely right that the priority must be
to protect jobs, whilst trying to create opportunities
for young people whose futures have been left badly
scarred. Equally, it is vital to put in place the foundations
now for how we rebuild our economy.
In the light of this the Chancellor did his best to
address this difficult balancing act with a package
of measures designed to get boots and shovels on
the ground, especially the National Infrastructure
Bank and Levelling up Fund to boost growth in those
regions which have been hardest hit.
The statement also contained some other positive
measures for manufacturers in the extension of the
incentive to recruit Apprentices and the continuation
of the Kickstart scheme. There was also a boost to
R&D funding which will be important if the UK loses
EU funding, and which we hope will be allocated to
rolling out the Made Smarter campaign nationwide
Now is a time to look forward, however. We have
“Let’s hope that in 12 months’ time we are
looking back on how manufacturers have
led the UK economy back to growth.”
recently published our annual Senior Executive Survey
with PwC. This flagship report looks at the risks and
opportunities for the year ahead, how manufacturers
are addressing these challenges and how they are
looking to take advantage of growth opportunities. As
you might expect, this year’s report is a curate’s
egg in that it offers many grounds for
optimism but also grounds for concern.
Let’s start with the positives.
Manufacturers are investing significantly
in new product development which
they regard as their number one priority
while they are confident of improving
productivity, developing digital skills
and also improving their environmental
performance which was regarded as
‘the right thing to do’ in second place in
terms of rankings. They are also looking to
grow their exports to Asia-Pacific and the United
States in particular, while the opportunities to re-shore
production and source a greater proportion from UK
suppliers ranked highly in terms of priorities.
The downsides, however, as you might expect, are
largely associated with the UK’s departure from the EU.
Customs delays and the increased cost of regulation
ranked first and second in terms of business risks, while
there was a striking concern about the UK’s ability to
attract international talent. Companies also said they
expected exports to the EU to fall while overall they felt
the UK would become less attractive as a destination
for manufacturing.
Despite these concerns, manufacturers were
confident about their own individual performance,
though less so about the performance of the UK
economy overall. Given the international exposure
of the sector, however, if the global economy
continues to recover, especially in the growing and
fruitful markets of the Far East, export opportunities
may be viable. The emergence of vaccines could
of course also be a game changer given how fast
a scenario we are working in at the moment. Let’s
hope that in 12 months’ time we are looking back
on a period where manufacturers have led the UK
economy back to growth.
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