Britain’s manufacturers have slashed their growth forecasts for industry and GDP in 2023 in response to the escalating energy crisis and the likely impact on consumers and major markets.
The revision downwards comes on the back of the Make UK/BDO Manufacturing Outlook survey Q3 2022, forecasting growth of just 0.6% in 2023, down from 1.7% forecast as recently as June. Make UK has also slashed its GDP forecasts from 3.6% this year to just 0.3% in 2023. The latest data also adds almost 60% of manufacturers plan to raise prices further in the next three months, fuelling inflation even more.
In response, given the potential for the economic situation to deteriorate further and force the sector into recession next year, Make UK is calling on Government to bring forward a ‘shock and awe’ package of policy measures on a scale in line with those seen during the worst points of the pandemic. This is essential to prevent permanent scarring of the economy, help protect viable companies and avert significant job losses.
Whilst industry has recovered strongly over the last year, the storm clouds are gathering in the face of eyewatering costs and a very difficult international environment. This threatens to shatter expectations of a sustained recovery from the pandemic and put many perfectly viable businesses at risk.
Stephen Phipson
CBE, Chef Executive of Make UK
Manufacturers continue to see activity slow, with growing inflationary pressure resulting in uncertainty for the sector. We are seeing input prices at near record levels for the second quarter in a row as profit margins continue to fall. There is great uncertainty across all business sectors, and we welcome government support to help with soaring energy prices...
...We hope the Government recognises the particularly uncertain and vulnerable position manufacturers and other energy-intensive industries find themselves in with respect to energy bills, which could stall momentum at a time when the sector needs investment. Substantial investment and ongoing government support are needed to avoid the loss of viable manufacturing businesses and job losses across industries. A commitment to enhance tax incentives to encourage investment in energy-saving plant and machinery would be helpful in the current circumstances.
