More than a third of British manufacturers plan to buy British to remedy future supply chain shortages, a major study finds.
The 2022 Create UK/PwC Senior Executive Survey has found that companies are building resilience into business models, which is highlighted by 35 percent of companies planning to buy from the UK and 31 percent planning to move some or more of their production to the UK.
Rising inflationary pressures and access to talent and essential skills have been identified as the biggest challenges businesses face. Despite this, 73 percent of companies believe that conditions for the manufacturing sector will improve in 2022.
In a statement, Make UK CEO Stephen Phipson said: “It is testament to the strength of manufacturers that they have emerged from the turbulence of recent years in such a relatively strong position. While clouds remain on the horizon in the form of rapidly escalating costs and access to key skills, the outlook is brighter for those who remain flexible, nimble and innovative.”
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According to the survey, nearly two-thirds (63 percent) of businesses believe the UK is a competitive location for manufacturing, while just 13 percent believe it is an uncompetitive place to do business.
However, a year after leaving the EU, two-thirds of companies said the departure had moderately or significantly hindered their business, with 56 percent of companies this year fearing further impact from customs delays due to import controls and changes to product labeling.
The more general positive growth outlook is reflected in all major markets, with 40 percent of companies forecasting growth in exports to the United States, followed by the EU. About a quarter (26 percent) are looking for growth in Asia and 21 percent in the Middle East. The EU market is expected to see the biggest drop in exports from ten percent of companies.
“To build on this, we now need a government that is fully committed to supporting the industry at home and abroad,” Phipson said. “This requires more than a growth plan, but a broader industrial strategy that sets out a long-term view for the economy and how we are going to achieve consistent economic growth across the country.”
Upskilling or retaining existing staff was the top priority for about two-thirds of companies (67 percent), followed by new product development (60 percent) and capital equipment (54 percent), while 78 percent experienced significant or moderate productivity increase this year.
Skills and talent also dominated the risk factors faced by companies, with access to labor being considered the greatest risk by 58 percent of companies, while nearly nine in 10 companies were not only concerned about losing their company’s skills. , but from the sector. Despite the current financial challenges, 45 percent of companies said they still plan to invest in apprenticeships by 2022.
The research also shows the increasing urge for ‘net zero’ for manufacturers. Half of companies (49 percent) said they plan to invest in green technologies or energy efficiency measures by 2022, while a third say this investment has increased. A third also said the process of moving to “net zero” had been accelerated by the recent COP 26 conference.
The survey of 228 companies was conducted between 27e October and 22nd Nov 2021.