The Make UK/BDO Manufacturing Outlook Q1 2021 lays bare the brutal impact of the pandemic with the sector having seen a 10% fall in output in 2020. In contrast, as the vaccine programme gathers pace and major markets recover Make UK has upgraded its growth forecast for 2021 from 2.7% to 3.9%, though this shows that it will take some time to recover the 10% fall in output seen last year.
After the seismic shock to the sector last year, manufacturers are now beginning to move through the gears and accelerate into recovery as major markets also begin to pick up. The major cloud on the horizon, however, remains the transition to new trading arrangements with the EU which go beyond ‘teething troubles’.
Stephen Phipson
Chief Executive, Make UK
With investment intentions remaining in negative territory, the Chancellor’s recently announced super-deduction tax incentive presents a real opportunity for those manufacturing firms with access to finance to bring forward investment plans into the qualifying period and boost their productivity. However, the proposed two year window is arguably too short. What manufacturers really need is certainty over the longer term to allow the sector to confidently invest over a 10-15 year horizon.
