Fears over the impact of the UK’s new trading relationship with the EU and the attractiveness of the UK for both investment and talent are clouding the outlook for manufacturers in 2021, as more companies believe the opportunities outweigh the risks. While many are investing in an effort to boost productivity and build agility and are confident about the prospects for their own companies and UK manufacturing as a whole, they are not so confident about the prospects of either the global or UK economies in 2021.
The Make UK Executive Survey 2021: Building Agility in Manufacturing, in association with PwC, shows that a third of companies believe the investment prospects for UK businesses will decrease having left the EU with just 18% of companies believing they will increase. In addition, just over a quarter of companies believe exports to the EU will fall with just 16% believing they will increase.
Furthermore, a third also believe the UK’s ability to attract international talent will decrease with just 11% believing the UK will be a more attractive destination outside the EU.This potentially puts at risk the ambition of the Government’s new immigration system which is specifically designed to encourage the best talent to come to the UK.
The survey also shows that customs delays are seen as the biggest risk to companies (47%) while the increased costs of regulation is reported as the biggest risk by just under forty per cent (39%). Over one in 10 companies (14%) also believe a relocation of a major customer out of the UK is their biggest risk.
To prepare for the challenges in 2021 our new report in association with PwC UK shows manufacturers are building resilience by:
Investing in people
New products
Markets and
Technology.
In fact, two fifths of companies are looking to invest in green technologies in an effort to reduce emissions and acknowledging that it is the right thing to do for future generations. And a further 44% of manufacturers are planning on investing in training, to help to boost productivity.
The transition to new trading arrangements with the EU was always going to be the biggest challenge facing manufacturers this year and the fact we have an agreement in place doesn’t alter that. However, just as the sector rose to the challenge of aiding the national effort at the start of the pandemic, it is clearly set to do so again as we re-build the economy and take advantage of the opportunities from digital technologies.
To ensure we cement the role of industry in the future economy we need to see a strategic vision from Government for the whole economy across the UK.
Stephen Phipson CBE,
Chief Executive, Make UK
I found it heartening to see that so many respondents are focusing on strengthening business resilience by investing in their people and diversifying their trade models in 2021. UK manufacturers are resilient by nature and, with the right investor and government support, their agility and drive will enable them to build new trade networks and embrace the clean, green digital revolution, ensuring the UK remains a go-to destination for many more years to come.
Cara Haffey
Manufacturing and Automotive Leader, PwC UK
