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Study highlights potential and challenges for UK manufacturing

Feb 26
 
Tags: PwC
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Study highlights potential and challenges for UK...

The UK manufacturing industry has a bright future, but will only realise its potential if it is able to overcome challenges such as Brexit and skills shortages.

That is according to the Annual Manufacturing Report 2018, which was published by Hennik Research and features a contribution from PwC.

The study contains a number of key findings, one of which is that nearly three-quarters (75 per cent) of manufacturers have confidence in overseas trade and believe that conditions are right to support growth.

However, more than two-thirds (67 per cent) also held the opinion that Brexit is making it difficult to form plans and is having a damaging effect on business prospects.

The deployment of digital technologies to enhance productivity could be an important strategy for manufacturers in the coming years, and a large majority (87 per cent) of the businesses surveyed were ready to invest in these innovations.

Six out of ten (61 per cent) were confident they could self-finance the investment or secure the funding from lenders.

Nick Peters, editorial director of The Manufacturer and author of the report, said the UK manufacturing industry enjoyed a "stellar" year in 2017 and has seen strong progress in recent years.

He pointed out that businesses have bought into the mindset that global success will be dependent on embracing 'Industry 4.0' technologies, such as the Internet of Things, artificial intelligence, cognitive computing and the cloud. However, their plans for expansion are being held back by other concerns.

"It isn't that manufacturers don't trust the extraordinary power and potential of these technologies - they manifestly do, but they are following a familiar narrative established over previous decades and successive governments," Mr Peters said.

"They hesitate because they sense a lack of national economic purpose from the centre. Hopefully the government's anticipated new industrial strategy will resolve that."

Cara Haffey, PwC UK's industrial manufacturing and automotive leader, said the industry needs a regionally oriented action agenda, supported by local strategies encompassing "not just skills but also infrastructure, innovation and business growth."

Separate research, conducted by rapid manufacturing solutions company Protolabs in partnership with Censuswide, suggested that manufacturing firms could be doing more to take advantage of the latest technologies, at least in the eyes of other organisations.

A fifth of the businesses surveyed felt the sector is unprepared for Industry 4.0, with around a quarter still associating manufacturing with assembly lines (28 per cent) and manual labour (25 per cent). One in ten firms said they did not see any connection between modern manufacturers and innovative practices such as automation.

Stephen Dyson of Protolabs stressed that UK manufacturing is "powered by innovation" and has embraced digital technologies and automation possibly more than any other sector.

"Industry 4.0 is more than a concept - we are living in it right now," he added. "However, the results of this survey indicate that there is limited understanding of Industry 4.0 and the impact it has already made."

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Image: iStock/PJ66431470

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