Division in the ranks is holding manufacturers back

Posted on 27 Jun 2012 by The Manufacturer

Research carried out by Siemens shows that manufacturers are divided in their views about government support and the economic outlook and the industrial giant has called for greater unity.

The Siemens Industry UK report, Industry Pulse – Challenges and Outlook for Manufacturing, revealed that there are variations in confidence across the manufacturing sector as a whole. Half of those surveyed were optimistic about the possibility of growth over the next 12 months while 16% were negative and 34% neutral.

Siemens, Make it in Great Britain
Juergen Maier, managing director, Siemens Industry UK

For Juergen Maier, managing director at Siemens Industry UK, this represents cause for concern and he is emphatic in the belief that more must be done to raise the ambitions of the apathetic or negative half of the sector. “Industry has a central role to play in helping to rebalance the economy. In order to do this, we have to be joined up and agree on the priorities for achieving export led growth.

Only a small minority of UK manufacturers seem to be on board with this agenda however. The Siemens report revealed that 69% of manufactures have seen order volumes driven by domestic as opposed to overseas demand, suggesting the UK economy is taking time to reorientate toward export driven growth.

When investigating industry opinion around the effectiveness of government support for manufacturing Siemens again found divided opinion. Small firms, it seems, remain skeptical about government’s commitment to a rebalanced economy with 26% of smaller companies saying that government should do more to support them.

By contrast, almost half of manufacturers with over 500 employees said that they felt government was taking good measures to raise the profile of manufacturing in the UK and emphasize its economic importance. The Made it Britain campaign was specifically identified as having made a positive impact.

In apparent conflict with their calls for more government support however, smaller firms were high in confidence with 62% expressing optimism about their performance over the next 12 months. 

Such ambitions are not however, matched with similar commitment to investment across the board. 41% of UK manufacturers are planning to increase their investment levels in the year ahead, while 51% are less upbeat, saying they have no appetite to invest.

Commenting on the conflicting messages in Siemens’ report Mr Maier concluded:  “The fact that confidence is erring on the optimistic side is encouraging. It’s good to see that campaigns such as Make it in Great Britain are making a difference for a significant proportion of manufacturers and I really believe this kind of support can be transformational, not only in increasing morale, but also impacting on the bottom line.”

He cautioned however, that such programmes need the full weight of industry behind them if a “solid recovery” is to be achieved and also repeated his concern at the lack of focus on exports as a central concern.