Make UK/BDO survey: UK manufacturing industry is in recovery
“After the seismic shock to the sector last year, manufacturers are now beginning to move through the gears and accelerate into recovery as demand at home increases and major markets also begin to pick up,” commented Stephen Phipson, Chief Executive at Make UK.
“Looking forward, we are now at an economic crossroads. We have a major opportunity for Government and Industry to work together on a long-term vision which ensures we take advantage of the acceleration in technologies, our capacity for innovation and world class academic and science base. Future generations will not look back kindly if we do not grasp it,” added Phipson.
Manufacturing market survey findings
As the COVID-19 vaccine programme in the UK continues to gain momentum and major markets recover, Make UK reports that it has upgraded its growth forecast for the industry in 2021 to 3.9 per cent up from 2.7 per cent, and its GDP forecast from 5.4 per cent to 5.5% in 2021.
In addition, UK orders have risen. However, export orders have remained negative, despite a significant rise in manufacturing in Europe. “This would suggest that both UK and EU companies have yet to come to terms with the new trading arrangements with Make UK believing that there are impacts on trade which go beyond ‘teething problems’,” states Make UK.
While investment intentions remain negative too, they have significantly improved, with Make UK hoping that the budget announcement of a ‘super-deduction’ tax will provide a boost.
“While the results of this quarter’s survey are encouraging, the next 6-9 months will nevertheless be critical for those manufacturers facing financial distress. Many will have deferred tax payments and taken on additional loans to help them through the crisis. The recently announced extension of the furlough scheme and other support measures will help in the short term, however, many will need to use this time to plan and implement turnaround strategies - and in certain cases take some tough decisions,” commented Richard Austin, Head of Manufacturing and BDO.