Close to half manufacturers expect improvement in 2021

Posted on: January 11th, 2021 by EditorP

The 2021 Make UK/PwC Executive survey (conducted in November 2020) shows 48% of respondents expected significant or moderate improvement for manufacturing in 2021. 51% saw opportunities outweighing the risks for their businesses, given significant investments in boosting productivity and agility.

However, 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. A third of companies believe investment prospects for UK businesses will decrease having left the EU (18% believe they will increase). 26% believe exports to the EU will fall (16% believe they will increase).

Customs delays are seen as the biggest risk to companies (47%) as the UK leaves the EU, while concerns over national and local lockdowns were the second biggest risk (46%). More than a third (39%) saw increased regulatory costs as the biggest, while 14% reported relocation of a major customer out of the UK as their biggest concern.

Manufacturers were more confident about the prospects for their own companies than for either the global or UK economies, with 56% seeing a deterioration in the UK and 46% negative about global prospects.

Nevertheless, 30% of respondents said they are planning to enter new markets this year. A quarter of respondents reported they were looking to reshore overseas activities, with a similar proportion seeking new or additional UK suppliers.

While controlling costs remained the biggest priority for companies, 57% of manufacturers said they were investing in new product development with a similar number also planning capital investment, both of which encompassing a significant commitment to digital technologies.

44% of respondents were committed to training and 37% investing in apprenticeships despite the difficulties caused by the pandemic. As a result of these investments 54% of companies are expecting to see an increase in their productivity in 2021.

The survey of 206 companies was conducted between 11 and 30 November 2020.

Full copy of Survey Results here

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