Survey highlights industry concerns over energy

Posted on 20 May 2011 by The Manufacturer

A recent survey conducted by the Institute of Mechanical Engineers has made it clear that the prime concern of UK manufacturers is the rising cost of energy.

Energy costs are a bigger cause of unease than labour costs, falling consumer spend and the administrative burden of regulation, according to a new survey by the Institution of Mechanical Engineers. As the government continues to push its green agenda, rising environmental taxes are creating even more of a pressure on manufacturer’s ability to compete internationally.

Institution of Mechanical Engineers president John Wood said: “The UK is showing clear international leadership by moving forward with its transition to a low carbon economy and this is going to mean higher energy costs for everybody.”

“Manufacturers are worried, and Government needs to make sure it doesn’t force energy intensive industries out of the UK and into countries with more lax climate change targets. This is of benefit to neither the UK economy nor the environment,” he added.

Recently, Jeremy Nicholson, director of the Energy Intensive Users Group warned that the UK’s energy policy risks decarbonising the economy through deindustrialisation more than switching effectively to renewable energy: “If we tax too much and make fossil fuel energy generation expensive, we won’t decarbonise the economy by reducing carbon from power stations, we’ll decarbonise it by shrinking the economy.”

“The Government needs to move forward quickly with its promises to mitigate the effect of ambitious climate change targets on energy intensive industries in the UK,” said Mr Wood.

Of the 1,000 manufacturers polled 60% said that increasing energy costs were of “high concern” to their business, while 52.4% said the same about increasing cost of supplies and components, 43.2% on administrative burden or regulation and 35% said rising labour costs. Falling consumer spend was of high concern to 30.9% of manufacturers, while exchange rates just 29.1%.