May 2021

n NEWS May 2021 www.drivesncontrols.com 6 UK manufacturers are at their most optimistic for nearly 50 years DURINGTHETHREEMONTHS to April, optimism among UK manufacturers improved at its fastest rate since April 1973, while investment intentions saw a strong, broad-based rebound, according to the Confederation of British Industry’s latest quarterly Industrial Trends Survey. The CBI survey of 288 manufacturers found that firms are expecting to boost capital spending on plant and machinery, product and process innovation, buildings, and training and retraining, in the coming year. In particular, their plans to invest in Some smaller manufacturers can now receive up to £8,200 for taking on a new engineering apprentice, by combining support schemes, according to the Manufacturing Technology Centre (MTC). In his budget earlier this year, the Chancellor Rishi Sunak doubled and extended the financial incentives available to support employers who create new jobs for apprentices. This amount can enhanced by tapping into a partnership between MTC Apprenticeships and Lloyds Bank, while SMEs with fewer than 50 employees can apply for a further £4,200 towards their apprentice’s wages through MTC Apprenticeships’SME Salary Support Scheme. Employers with a payroll of more than £3m can use their apprenticeship levy to cover training costs. MTC says that combing these schemes can significantly offset the cost of employing an apprentice in their first year. As part of the Chancellor’s plans to help the UK economy to recover from Covid- 19, businesses now receive a bonus payment of £3,000 per new apprentice hired until September 30, 2021, regardless of age. This is in addition to the £1,000 payment for apprentices aged 16–18, so some employers will receive £4,000. “Apprentices are set to be instrumental in supporting Britain’s economic recovery from the Covid-19 pandemic,”says David Hughes, managing director of MTC Apprenticeships.“As the country begins to re-open after the third national lockdown, manufacturers need to ensure their workforces can meet demand and support their future growth. “The improved scheme is a fantastic opportunity for businesses of all sizes to take advantage of the benefits apprentices offer,”he adds. The MTC reports that it received a record number of applications for apprenticeships last year. https://the-amtc.co.uk/apprenticeships Employers are offered up to £8,200 to take on an engineering apprentice plant and machinery are at their strongest since July 1997. The most common reasons given for this expected increase in spending are to improve efficiency (cited by 66% of respondents) and to replace existing plant and equipment (cited by 63%). Manufacturing output was broadly flat in the quarter to April, while total new orders grew at their quickest pace since April 2019. Manufacturers expect growth in both output and orders to pick up rapidly in the current quarter. Domestic orders grew at their fastest since July 2018 and firms expect this will improve further. Meanwhile, export optimism for the year ahead has strengthened after successive decline for almost three years. New export orders stabilised after falling for nearly two years and are expected to hold steady in the quarter ahead. However, cost pressures continue to temper the outlook for the manufacturing sector. In the quarter to April, the growth in costs accelerated at its fastest since April 2011, and manufacturers expect costs to grow at a similarly rapid rate during the current quarter. The number of people employed in the sector grew at its fastest rate since April 2019 and is expected to accelerate further over the coming three months, with expectations at their strongest since April 1974. “Manufacturers have reported the biggest increase in optimism in nearly 50 years in this month’s quarterly survey,”says the CBI’s chief economist, Rain Newton- Smith. “Phased reopening has lifted the mood among firms, notably driving orders, employment, and investment plans. “However, rising costs are an increasing concern for many businesses, and seem to be putting upward pressure on prices as firms try to protect their margins,”she adds. “Continuing to support firms while they get on a steadier footing as restrictions ease will be crucial to recovery. The Government should continue to work closely with business to ensure reopening is a success, while boosting competitiveness over the long-term.” Ineos group director Tom Crotty, who chairs the CBI’s manufacturing council, says: “It’s hugely welcome to see manufacturers planning to invest more in their businesses following what has been an extraordinarily difficult period for the sector. After all, a more productive manufacturing sector can be an engine for the UK’s economic renewal and long-term growth. “As the UK gradually recovers from Covid-19,”he adds,“there is a fantastic opportunity for the government to work in partnership with manufacturers to forge a new future for the sector founded on sustainable growth and innovation.” www.cbi.org.uk Rain Newton-Smith: reopening has lifted the mood