Three quarters of manufacturers expect conditions in the sector to improve in 2022, with investments in skills, productivity, green technologies and re-shoring supply topping the agenda.
According to a major survey conducted by PwC and Make UK, the majority of manufacturers have weathered the storm of the last couple of years and 73 per cent now believe the opportunities ahead of them in 2022 outweigh the ongoing risks they face.
The findings show that manufacturers are adopting strategies to build resilience into their business by looking at their supply chain, investing in people, innovation and green technologies.
Upskilling or retaining existing staff was seen as the biggest priority for the majority of respondents (67 per cent), with nine out of ten companies not just worried about losing skills from their business, but the manufacturing sector entirely. This was followed by new product development (60 per cent) and capital equipment (54 per cent), with 78 per cent expecting a significant or moderate increase in productivity this year.
Around a third of companies (35 per cent) are also planning to counter supply chain shortages by increasing their use of British rather than international suppliers, with a similar proportion planning to re-locate some or more of their production back to the UK.
Cara Haffey, PwC’s UK Industrial Manufacturing and Automotive Leader, commented:
“Despite facing an unprecedented combination of continued Covid pressures, cost inflation and supply chain issues, our manufacturers are responding with an impressive amount of agility and resilience, which will stand them in good stead for the year ahead.
“They have learned valuable lessons about their supply chain vulnerabilities and the resilience needed to respond to unforeseen international or domestic risks, and are strengthening their businesses digitally as well as continuing to focus on talent and skills.”
The survey also revealed that the recent COP26 climate summit has accelerated investments in the drive to net zero greenhouse gas emissions. Half of manufacturers (49 per cent) said they plan to invest in green technologies or energy efficiency measures in 2022, with a third saying investment in this area has increased.
Cara Haffey added:
“We are particularly pleased by the breadth of net zero ambitions reflected in the report. Across the UK we’re seeing an increasing number of businesses underpin their environmental, social and governance strategies with practical applications to decarbonise their operations and ambitions to build out their green skill base through the recruitment of 'green' jobs, a move that has already been flagged as outperforming the UK sector average in our recent Green Jobs Barometer.”