Britain’s manufacturers could boost their own investment by up to £10 billion if they were to take advantage of the range of public and private financial options available to them, helping to raise the investment potential of the sector overall by up to a fifth and address the UK’s long-term productivity weakness.
This is according to Make UK’s latest report – Finance: Opening Doors to Investment in Manufacturing - published today in partnership with NatWest and Lombard. It also finds that more than a quarter of companies (26%) would increase their own investment by up to a fifth if access to finance was improved, while more than one in ten (12%) would increase their investment by up to half.
According to the report, access to finance will be critical for companies’ investment plans in the next two years in capital equipment, automation, energy efficiency and cyber security. It is also vital for making sure the UK keeps up in the race to net zero, and in areas such as innovation and automation.
However, its findings also show that barriers to finance remain, in particular around a lack of awareness of public sources of finance and government schemes tailored towards manufacturers, such as the Horizon Europe and Help to Grow programmes.
Furthermore, domestic political uncertainty and increased costs are also deterring manufacturing from accessing finance.
Access to finance is like fuel for manufacturers. Without it many manufacturers would be unable to make the continuous investments in capacity and innovation which are so essential in such a dynamic sector with an ever-changing external environment.
However, there is currently significant investment which is lying untapped due to a lack of awareness among companies of the private and public options available to them. If we can unlock the options that finance provides then it will produce significant potential for manufacturers.
Fhaheen Khan
Senior Economist, Make UK
Finance is fundamental to helping UK manufacturers unlock investment to grow, innovate or become more sustainable. In the face of constant significant challenge, the manufacturing sector has remained resilient, and businesses have continued to invest to ensure they remain future fit.
Access to external finance is a key enabler to support these ambitions. That said, with such a broad range of options and providers available, choice can seem overwhelming. There is a real opportunity for greater engagement between manufacturers, lenders and other key supporters across the eco-system to collaborate to provide flexible funding and solutions to ensure future financial stability. That’s why we’re working with key industry partners to foster greater benefits for manufacturers.
Laura Capper
Head of Manufacturing and Construction, NatWest
For any business to grow you need to be flexible and access to the right finance at the right time is crucial to enabling flexibility and quick response to market changes. At Sleepeezee we were looking to improve our energy efficiency. Finance helped us with the installation of nearly 600 solar panels that enabled us to cut carbon emissions and produce our own electricity.
External finance enabled us to avoid comprising cashflow for working capital needs, while meeting our ambitions for growth. It can open doors for manufacturers and I would urge businesses to find out more and explore all the options. Keeping our lenders, Lombard and NatWest, involved in our business plans and ambitions from the start has meant they have been a trusted partner throughout, making it easier to access the right finance to suit our needs. It can seem overwhelming but it pays off if you find the right lender to support you on your journey.
