Drives & Controls Magazine February 2023

More than you expect. Packaging. Sensors. Solutions. Automated systems for production and packaging processes need to be more flexible, more efficient and more intelligent. We help you with our innovative sensor solutions. From the first to the last step in the packaging process. www.leuze.com/packagingsensors DO WE HAVE THE ENERGY TO SURVIVE? Although wholesale energy prices may have eased a bit in recent weeks, the cost of energy remains critical for many manufacturers. A survey of more than 200 manufacturing executives published last month by the manufacturers’organisation Make UK and PwC reveals that almost two- thirds of them (64.3%) regard high energy costs as the biggest risk to their businesses, while even more (68.9%) feel that uncertainty over energy costs is the biggest risk to confidence. According to the survey, 70% of manufacturers expect their energy costs to rise further this year, with two-thirds planning to take actions such as cutting production or jobs. But energy is not the manufacturers’only worry. Higher pay settlements and the skills shortage mean that 91% of the companies expect employment costs to rise, while 87.2% are anticipating higher transport costs. There is also evidence that the political instability of the past year has impacted the competitiveness of the UK as a manufacturing location, with the proportion of companies believing it to be a competitive location halving from 63% last year to just 31%. But despite this largely negative picture, UK manufacturers continue to show resilience with many planning to invest during 2023. More than two-thirds (71.5%) intend to spend money on developing new products, 69.3% are planning to upskill or re-train their staff, while 61.7% say they will invest in capital equipment. More than half of those surveyed (55.4%) plan to spend more on apprenticeships. Make UK regards these investments as being especially encouraging because they are in areas that have traditionally been cut during downturns. To tackle energy costs, more than half of the companies (54%) are planning to invest in energy efficiency, with about a quarter considering on-site generation. To encourage such investments, Make UK is calling for incentives to adopt green technologies through capital allowances and tax reliefs. Unfortunately, the report doesn't drill down further to discover whether the manufacturers are planning to spend more on energy-saving technologies such a high-efficiency motors and variable-speed drives. Make UK’s CEO Stephen Phipson predicts that the year ahead“is going to be very challenging for manufacturers with a potent mix of factors testing their resolve. Ongoing supply chain disruption, access to labour and high transport costs, which show no sign of abating, can be added to a growing sense of economic and political uncertainty in their main markets. “The biggest risk, however, remains the eye-watering increases in energy costs which has left the clock ticking for many companies.”He regards the energy relief scheme as being“a sticking plaster”, adding that“there is a very strong and urgent case for matching the more generous schemes our competitors have in place”. Hopefully the worst of the pandemic is behind us now, but that doesn’t mean that UK manufacturers are out of the woods. The next few years will continue to be challenging. Tony Sacks, Editor n COMMENT