HSBC: Behind UK Manufacturers Optimism on US Manufacturing

Something truly unprecedented is happening in the UK. People are… having positive opinions about America. 

That is according to exclusive data from HSBC UK on payments and subsidiaries, which showcases that more than half (52%) of UK manufacturers are positive about the future of the UK-US economic relationship. 

This data comes at an interesting time, ahead of US manufacturing day and in the run-up to an uncertain election that will sharply determine the trajectory of the country.

Experts at HSBC explain the root causes of this optimism, highlighting the incredible power of industry support- from multiple perspectives. 

A data breakdown

HSBC UK surveyed more than 200 decision-makers in medium and large manufacturing firms in the nation. It found that nearly a third of businesses (31%) said there was nothing whatsoever stopping them from growing in the US. 

More than a quarter (29%) of respondents expressed that, while they weren’t doing business with the US now, they would definitely consider doing so in the future. 

When asked how to encourage further business with the US, 36% of respondents pointed to improving the exchange rate and receiving advice from government bodies/ banks on successful expansion.

“The US is comfortably the largest export market for UK manufactured goods and this presents huge opportunities for UK businesses with growth ambitions,” says Rohit Moudgil, Head of Manufacturing and Industrials at HSBC UK.

“This is further underpinned by US policies such as the Inflation Reduction Act which offers subsidiaries designed to attract inward investment into the US. This has driven demand for manufacturing equipment, components, skills and know-how, with UK businesses helping to meet some of that demand.

“Our interactions with clients and industry bodies point to a renewed optimism in the sector and our survey results show manufacturers are also optimistic about the future relationship with the US.”

This response underscores the importance of support for the manufacturing sector- in the form of investment, expert guidance and bold political policies. 

HSBC is a true advocate for this, as a financial institution with a legacy of helping manufacturers across the UK pursue US expansion. A key example of this is Grayson Thermal Systems.

HSBC & Grayson Thermal Systems 

Grayson Thermal Systems was founded in Birmingham in 1978, first as a small vehicle radiator repair business. In 2005 it introduced thermal management systems for hybrid vehicles and developed its first Battery Thermal Management System (BTMS) in 2015. 

It was also back in 2015 that the company first pursued US expansion, establishing a subsidiary in Franklin, Indiana. 

Today Grayson works with leading manufacturers in North America and Canada, supplying its thermal management solutions for a range of applications.

These include construction vehicles, commercial rail, advanced mining and the iconic American yellow school bus. Grayson has targeted the US school bus sector as it underwent its rapid electrification transition, boosting its growth further.

HSBC US helped fund this transition, providing a seven-figure funding package to support Grayson Thermal Systems' growth in the US and the development of its Indiana facility.

“Our North American expansion continues to go from strength to strength, driven by our commitment to product research and development,” says Stuart Hateley, Managing Director of Grayson Thermal Systems. 

“This focus has enabled us to introduce innovative products to the market, including our portfolio of refrigerant-based liquid battery chillers and advanced heat pump solutions. 

“These, along with our high-quality thermal system components, are gaining significant traction in our key sectors.

"Our partnership with HSBC is instrumental in supporting our North American expansion. 

“Their funding has enabled us to invest in the facilities, infrastructure, and talented people required to uphold the high standards of quality and service that our customers expect, as we advance on this exciting journey of growth."

The reasons behind the positivity

Stuart Tait, Head of Commercial Banking at HSBC UK, says that:

"Business partnerships between the UK and the US remain strong. UK businesses view the US as an attractive growth market because of its stable economy, transparent regulatory environment and cultural similarities.”

This is all true, with this perception only strengthening with growing manufacturing investment. The Biden-Harris administration has had its ‘Made In America Agenda’, promoting the use of US-manufactured materials and spearheading the CHIPS and Science Act to enhance semiconductor manufacturing. 

Not to mention the Inflation Reduction Act, which has powered the future of US clean energy manufacturing. 

The private sector has committed nearly US$900bn in investments in American manufacturing, powering high-speed rail and developing port and EV infrastructure. 

The total reindustrialisation investment by US organisations is projected to reach US$3.4 trillion over the next three years.

It's crystal clear to US manufacturers, investors and companies abroad that manufacturing is a big policy priority. 

And the optimism that comes with revitalisation? Can be very infectious. UK manufacturers recognise that the US right now is full of opportunity, and expanding there gives them a strategic edge.

“International growth enables companies to diversify their business, with many viewing expansion into new markets as a quicker way to drive growth, rather than new product development,” adds Stuart.

"In the first half of this year, HSBC UK received more new client referrals from HSBC US than any other HSBC market globally.

“HSBC has a long history supporting trade between the two countries and our dedicated teams both here and in the US provide expert advice to companies looking to expand internationally.”

Of course, the optimism can also be attributed in part to the helping hand of financial leaders like HSBC.

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