The UK high tech manufacturing sector is “cautiously upbeat” about its prospects for growth in 2013, according to the fifth wave of the GE High Tech Index referring to November-December 2012.
Less than one in five (17%) of the 405 high tech manufacturers questioned said that they felt positive about the current economic situation in the UK. However, this figure increases to 44% when the interviewees consider the conditions for high-tech manufacturers.
The companies surveyed were also slightly more positive about the UK economy going forward into 2013: over a third (35%) felt the overall economic outlook would get better in 2013.
The most common reasons provided for this cautious optimism were exports to non-eurozone countries, cited by almost three in five, followed by the weak pound and falling inflation.
Those questioned were also relatively confident about the UK high tech manufacturing sector in 2013, with 69% of manufacturers saying they felt the outlook for their own business performance in 2013 would be either a little better or a lot better
It is clear though that concerns still persist about the current skills gap in the high tech manufacturing sector. Around a quarter (23%) of those interviewed for the survey reported having to leave positions unfilled in their workforce due to skills shortage. For two thirds (66%) of these companies this has been for more than one position.
GE UK CEO Mark Elborne commented: “The GE UK High Tech Index was launched two years ago and the six monthly surveys have shown the sector has weathered the economic storms relatively well. Despite concerns one in five of these businesses in our survey expects to have grown by 10% in 2012.
According to the survey, those who believe the performance of their business will get better attribute this hope to more customer enquiries, orders and new business (20%), an increase in exports (17%) and new products or research and development (17%).
Just under six in ten (57%) of those questioned expect their business to have grown in 2012. However, the high tech manufacturing sector is showing resilience: one in five of those surveyed (19%) expect their business to have grown by over 10% in 2012.
According to the GE High Tech Index, the availability of bank funding is still a big concern, with just 16% of survey respondents believing it is plentiful and readily available. Three in ten (27%) believe it to be available but on fairly onerous terms.
Questioned businesses felt that taxation, regulation and energy policies had the most impact on their businesses, with 35% of them saying they had felt the impact of tax policies (for 50% this was negative).
There are also high levels of concern about the UK’s future energy policy. The vast majority of companies (84%) are worried about the affordability of energy, while three in five (61%) expressed concern about security of supply.
There is consensus that lack of clarity on this policy area is most likely to have had a negative impact.
Mark Elborne added: “It is good to see the UK high tech manufacturing sector saying it is positive about 2013. There are some sectors which have particularly good growth potential for the UK such as oil & gas, where we at GE have recently announced job additions.”