Britain’s manufacturers are more positive about the growth outlook as they enter 2022, with greater confidence in the prospects for their own companies than either the global or UK economies, according to a major survey published today by Make UK and PwC.
Optimism tempered by fight for talent and escalating input costs.
- Three quarters of companies expect conditions in manufacturing to improve
- Two thirds of companies see the UK as a competitive location for manufacturing – but as many say leaving the EU has hampered their business
- Increased input costs and access to skills the biggest risks for companies
- COP 26 accelerates the drive to invest in ‘net zero’
- Third of companies looking to re-shore production, similar number to replace overseas suppliers with UK based
The 2022 Make UK/PwC Senior Executive survey shows the scale of uncertainty facing business in the current turbulent global environment, with more than half of companies saying the biggest challenges facing them had changed in the last twelve months. Their optimism is also tempered by escalating inflationary pressures and access to, as well as retaining, talent and key skills which are by far the biggest issues companies are having to address.
In the face of these challenges, however, the majority of manufacturers have weathered the storm of the last couple of years with almost three quarters of companies (73%) now believing conditions for the sector will improve in 2022, with a similar number (73%) believing the opportunities for their business outweigh the risks. To date, the sector appears to have seen little or no disruption from the latest Omicron variant to alter this confidence.
Furthermore, almost two thirds (63%) of companies felt the UK to be a competitive location for manufacturing with just 13% believing it to be an uncompetitive place to do business.
To take advantage of these opportunities manufacturers are prioritising improving productivity, investment in their people as well as new product development, while the recent COP 26 summit appears to have accelerated investments in the drive to ‘net zero’.
The UK manufacturing upturn continued as 2021 came to a close, data released has shown.
According to the latest IHS Markit/CIPS UK Manufacturing PMI, manufacturing output, new orders and employment all rose in December. The release outlined how the manufacturing industry’s expansion would have been even stronger had it not been for continuing logistic disruptions and staff shortages.
Nevertheless, a slight easing in supply chain delays helped boost output volumes and reduce some of the heat from input price increases.