NEWS 6 HYDRAULICS & PNEUMATICS January/February 2025 www.hpmag.co.uk Britain’s manufacturers believe the introduction of a formal industrial strategy will significantly boost investment, improve productivity, and help address future skills needs, according to a recent major survey. The findings are drawn from the annual Make UK/PwC Senior Executive survey, which captures the views of senior manufacturing executives on the opportunities, risks, and challenges they face in the year ahead, as well as their outlook for the UK and global economies. The survey highlights manufacturers’ optimism about the benefits of an industrial strategy, despite challenges such as rising costs and the threat of a trade war. A majority of manufacturers see the UK as a competitive place to produce goods, with nearly two-thirds (63%) stating that the opportunities for their businesses in 2025 outweigh the current risks. However, the survey also reveals a divided view on the UK economy, with as many executives expecting it to deteriorate as improve by 2025. In response to these mixed economic signals, manufacturers are demonstrating resilience by prioritising innovation, upskilling, and market expansion. Many companies are turning to new technologies and automation as a means of mitigating rising costs and improving operational efficiency. Make UK is now calling on the Government to urgently detail its plans for a long-term industrial strategy following recent consultations, arguing that such a strategy is crucial to sustaining business confidence and strengthening the relationship between industry and government. Stephen Phipson, Chief Executive of Make UK, said: “Manufacturers have demonstrated their resilience over and over again in recent years and, despite the numerous challenges they face, those that remain innovative and are prepared to invest in new technologies, expanding markets and, most crucially, their people will continue to thrive. But, they can only do this if they are operating in the most favourable business environment and there is little doubt that the next twelve months are set to be immensely challenging in a complex international environment. “To help companies navigate a way through these challenges it is now vital UK Manufacturers see industrial strategy as a ‘game changer’ for investment and productivity that Government sets out as a matter of urgency the immediate and significant priorities as part of its formal industrial strategy given the very clear benefits manufacturers believe this will bring. By doing this, it will help re-boot business confidence and ensure the year gets off on a positive footing in terms of the relationship between industry and Government.” Cara Haffey, Leader of Industrials and Services at PwC UK, added: “While it’s true that UK manufacturers are navigating a complex business landscape – compounded by rising costs – there’s a palpable sense of optimism and resilience underpinning the sector’s trajectory for 2025. This optimism is fuelled by hopes of increasing clarity on the proposed UK industrial strategy, as well as a decisive shift towards technology adoption. The sector is moving from viewing technology as a source of incremental improvements towards acknowledging its power to transform operations. “Additionally, there’s a strong focus on innovation, with companies investing in new product lines and business development to seize growth opportunities. This approach, alongside efforts in product development, upskilling, cost management, and embracing technology, positions manufacturers well to navigate challenges and contribute significantly to national economic growth.” According to the survey, over half of manufacturers (57%) said they would increase investment if a long-term industrial strategy were introduced. Additionally, 43% believe such a strategy would drive productivity improvements, while 42% see it as key to addressing future skills needs. Despite significant pressures, the survey shows that almost half of companies (49%) regard the UK as a competitive manufacturing base, compared with just a quarter who disagree. Moreover, 78% of manufacturers are developing new products, nearly half are deploying new technologies, and over a third (37%) are planning to expand into new markets. However, challenges remain, with the overwhelming majority of companies (92%) expecting employment costs to rise. Additionally, over three-quarters (76%) anticipate increases in other business taxes, while 72% foresee rising logistics and transport costs. Make UK is urging the Government to ease the burden of these cost increases by reducing business rates and introducing further measures to support decarbonisation and energy efficiency.
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