Survey Highlights Growing Confidence in the UK’s Competitive Landscape While Acknowledging Challenges from Economic Giants
London – A recent survey conducted by Make UK and PwC reveals that British manufacturers are increasingly viewing the UK as a more competitive location for their activities compared to the previous year, signaling a positive shift in sentiment. The survey, involving over two hundred senior manufacturing executives, underscores a sense of cautious optimism among companies despite ongoing challenges.
After navigating through the turbulent years of the pandemic and energy price shocks, manufacturers are expressing bullish outlooks for 2024. The majority of respondents are optimistic about the prospects for manufacturing, with many viewing opportunities as outweighing risks in their business landscape.
Investments in new products, expansion into new markets, and the accelerated adoption of digital technologies are cited as key strategies to enhance business operations and maintain competitiveness. The survey indicates that manufacturers are actively backing their positive outlook with concrete actions to drive innovation and growth.
While optimism prevails, the survey also highlights manufacturers’ concerns about the broader economic environment. Increased energy and employment costs, as well as challenges in accessing domestic skills, are identified as significant hurdles. Despite the positive sentiment regarding the UK’s competitiveness in Europe, there is a recognition of the formidable threat posed by economic powerhouses such as the US, India, and China.
Stephen Phipson, Chief Executive of Make UK, commented on the resilience of manufacturers throughout challenging times and expressed hope for improving conditions in a more supportive policy environment. He stressed the need for a long-term industrial strategy to solidify these positive developments.
Cara Haffey, Leader of Manufacturing at PwC, acknowledged the cautious optimism in the manufacturing sector, emphasizing the intentions of many companies to explore new products and markets in the coming year. Despite economic challenges, geopolitical uncertainties, and cost pressures, there is a sense that the horizon is becoming brighter.
Key survey findings indicate that over half of the companies (52.7%) perceive the UK as a more competitive manufacturing destination compared to just under a third (31%) a year ago. Notably, a significant portion (30.7%) believes the UK is gaining competitiveness against Germany, and a similar sentiment is observed concerning France (30.2%), Spain (29.3%), and Italy (28.3%).
However, concerns about the competitiveness against the US, India, and China are prominent, overshadowing the positive outlook. More than four fifths (44.4%) of respondents believe that conditions in the manufacturing sector will improve in the coming year, with 62% seeing opportunities outweighing risks.
As the manufacturing sector looks ahead, the survey indicates a strong focus on new products (52.7%), expansion into new markets (27.3%), and net-zero opportunities (26.3%). The role of digital technologies in boosting productivity is emphasized, with 71.2% of companies believing that digitizing operations will enhance operational efficiency, and 52.2% foresee generative AI increasing workforce productivity.
Despite the optimism, risks persist, with over half of the companies identifying increased energy costs (53.2%) and political instability (43.9%) as primary concerns. Supply chain disruption (36.1%) and a lack of access to domestic skills (35.1%) also pose significant challenges.
The survey, conducted between 8 and 29 November, offers valuable insights into the evolving landscape of UK manufacturing, capturing the sentiments and strategies of industry leaders as they navigate opportunities and challenges in the global marketplace.