Investment has to make commercial sense EDITOR’S COMMENT www.hpmag.co.uk HYDRAULICS & PNEUMATICS September 2026 3 No Budget can remove every uncertainty facing manufacturers, but this one can provide greater stability and address some of the costs holding investment back. ‘ ’ As the Chancellor prepares the Autumn Budget, manufacturers could be forgiven for being less interested in the language surrounding growth than in the conditions needed to deliver it. Most engineering businesses do not need persuading of the case for investing in new machinery, automation, energy efficiency or people; the harder question is whether, against the current backdrop of costs and uncertainty, the sums justify doing it now. The UK already provides significant tax relief for investment in plant and machinery, through full expensing for qualifying company expenditure and the £1 million Annual Investment Allowance, among other allowances. The priority should therefore be to give manufacturers some confidence that the investment environment will remain stable rather than subjecting it to repeated changes. Tax treatment matters, but even generous allowances will not turn a proposed investment into a purchase order when energy and employment costs are high, order books are uncertain and businesses are reluctant to commit capital. That has particular relevance for hydraulics and pneumatics because investment matters to our sector from both directions. Companies in our industry face the same pressures as other engineering businesses, while a substantial part of our market depends upon customers being prepared to invest in machinery, production equipment, mobile equipment and automation. There is a similar connection with energy policy, as much of what our industry is developing and selling today can contribute to lower energy consumption through measures such as correctly sized systems, variablespeed compressors, tackling compressed-air leakage, more efficient pumps and drives, electrohydraulic control and better monitoring. These are practical engineering improvements with measurable returns, but the initial investment still has to compete for capital with everything else a manufacturer needs to fund. The boundaries of fluid power are changing too as sensors, electronics, condition monitoring, predictive maintenance and connected controls increasingly sit alongside the traditional mechanical elements of a system. Programmes such as Made Smarter can help SMEs adopt these technologies, but support needs to be straightforward enough for smaller engineering companies to use and sufficiently practical to result in equipment being installed rather than another digital strategy being written. Skills also form part of the same picture, with engineers increasingly needing an understanding of mechanics, electronics, controls, software and data to work effectively with modern hydraulic and pneumatic systems. Training and apprenticeship policy needs to catch up with that reality. No Budget can remove every uncertainty facing manufacturers, but this one can provide greater stability and address some of the costs holding investment back. For the fluid-power industry, the test is fairly simple: does it make our customers more confident about signing the next purchase order? Aaron Blutstein Editor
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