The British manufacturers are confident that they will be able to expand the industrial sector of the country and turn the tide on history.
Make UK, the industry association, has released a snapshot survey that shows manufacturing could be responsible for 15% of Britain’s Gross Domestic Product, despite rising costs.
In Britain, the manufacturing sector has been in decline since the 1970s. Its share in the economy dropped from 25% of GDP to just 9.4% last year. A survey by Make UK, the accounting firm, and PwC of 205 senior executives of leading manufacturers revealed a renewed confidence in their future prospects.
The reason for this is a growing consensus at Westminster, and across political lines, that something must be done to improve the industry. There is also a growing belief that Britain has become a more attractive place to do business compared to its European neighbours.
Make UK, a group that represents 20,000 businesses, stated: “The year 2024 will be the perfect time to begin to change the dial, so we can raise manufacturing GDP by 15 percent.”
Over half of the companies surveyed viewed the UK as more competitive for manufacturing. Just under a third responded to the same survey a year earlier. Nearly one third of companies believe that Britain’s competitiveness is increasing against Germany France Spain and its industrial peers on mainland Europe.
More than half of respondents said that Britain cannot keep up with its long-term rivals, such as the United States, China, and India, which is now gaining in industrial strength.
Over two-fifths of manufacturers were optimistic about the prospects for next year, despite a fifth admitting to be more pessimistic in general.
Nearly two thirds of respondents said that the circumstances and environment in which their business operated was improving.
Stephen Phipson said, “Manufacturers are resilient and have shown this time and time again.” There is some hope now that the conditions are improving in a more stable and supportive policy environment. But this must be cemented into a long-term Industrial Strategy.
The manufacturers are expressing their optimism by naming new product launches, marketing campaigns and business development to increase sales as the top strategies that they will pursue this year. More than two-thirds of manufacturers are preparing for the energy cost to continue rising in 2024. Nearly 90% of respondents expect labour costs to rise.
Deloitte reports that the financial heads of UK’s biggest firms are also optimistic about their businesses in 2024. The mood among finance leaders is at an above-average level for the second quarter in a row. A net 11 percent of CFOs are more optimistic than they were 3 months ago about their company’s financial prospects.
Ian Stewart, chief economics, said that these findings might seem to be at odds with recent news, notably a contraction of third quarter GDP, and forecasts for sluggish UK Growth in 2024. While the pace of 2023 growth slowed, the activity was more resilient than anticipated, with low unemployment, stable corporate profits and a lack of stress on financial markets. Importantly, inflation has dropped sharply since summer, which has boosted expectations for earlier interest rate cuts.
One Poll, commissioned by software specialist Aurum Solutions to conduct a separate survey, found that 80 percent of CFOs expressed concerns about the rapid pace of digital advancement. Over one-tenth of finance professionals, or 14%, are not confident in their understanding of AI. This “highlights the need for increased education and awareness initiatives among finance professionals”.