Energy costs are anticipated to be the single biggest rising cost facing manufacturers through a difficult 2023, pushing many to re-evaluate their business practices, new research says.
In a survey of over 200 senior manufacturing executives commissioned by Make UK and PwC, 70 per cent said they expect their energy bills to significantly increase in 2023, with a further 20 per cent expecting at least a moderate increase. Energy was also identified as the single biggest risk to remaining competitive in the manufacturing sector.
Stephen Phipson, Chief Executive at Make UK, explained:
“The year ahead is going to be very challenging for manufacturers. 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.”
Starting from 1 April 2023, most businesses will see a significant reduction to the government-funded discount they have been receiving on their energy bill since the autumn. For some, the reduction could be as much as 90 per cent or more.
As such, experts are urging businesses to take action into their own hands rather than rely on government support. Lindsay Ventress, Operations Manager at energy and environment consultancy EcoAct, said:
“With the announcement of reductions in energy bill support from March, it has never been more important for organisations to take action to reduce energy consumption and especially to reduce energy wastage.
“Businesses ultimately can’t rely on government commitments and must take the initiative into their own hands, carefully examining and identifying energy efficiency actions that will help lower their energy bills but also reduce emissions right now. Irrespective of the industry, business leaders must scale up energy efficient solutions across their workplaces and operations, not only to contribute to wider business sustainability strategies but also to free up funds for other parts of the company.”
Advice and support
According to Make UK’s research, ‘adjusting business practices’ is the top action manufacturing leaders plan to take to mitigate rising energy costs in 2023. Over two fifths of those surveyed (43 per cent) also said they plan to invest in energy efficiency measures or green technologies.
SME manufacturers in Greater Manchester can access expert advice and guidance from the Growth Hub on both counts, including:
- One-to-one advice from energy efficiency specialists through our Sustainability and Net Zero Service, who are experts in their field when it comes to identifying and implementing opportunities to cut energy waste from buildings and processes – often at low or not cost
- Our expert Manufacturing Service can also provide tailored one-to-one support to improve business practices and take costs out of your business through lean measures
- A set of introductory energy saving guides and recorded webinars are also available via our #HereForBusiness campaign.
For more information on the support available, contact one of our Manufacturing Advisors today.