Mike Rigby, head of Manufacturing, Transport and Logistics at Barclays, highlights some of the key findings from this year’s Annual Manufacturing Report.
The Annual Manufacturing Report 2018 was launched recently at the House of Lords and, as in previous years, it offers a revealing insight into the mind-set and attitudes of industrial business owners and their decision-makers.
The report, researched and compiled by Hennik Group, publishers of The Manufacturer,has sections on many of the front-of-mind challenges executives are grappling with – some of late, several for far too long.
These include: Smart Factory, Finance & Investment, Skills & Training, Industrial Digitalisation, Government Policy & Industrial Strategy, and Growth & Exports.
I won’t try and unpick every statistic and comment, you can download the report and do that for yourself; but I do want to highlight what I consider to be some key findings:
Growth & Exports
75% of manufacturers say that they have an export-based growth strategy
That such a high number of manufacturing businesses are focused on exports is a strong, positive statement. A robust export plan is not only a useful indicator of a management team’s ambition, it is also a vital part of our nation’s future – even more so considering ongoing trade negotiations.
As the report highlights, most manufacturers believe that conditions are right for improving exports, and helpfully, many don’t have to move from a standing start – manufacturing already accounts for almost half of all UK exports.
The timing couldn’t be better. New global research from Barclays has uncovered the most coveted British goods abroad, and the premiums international consumers are prepared to pay for ‘Brand Britain’ products.
85% of manufacturers are using digital technology to transform their business
This really emphasises the innovative place we find UK manufacturing in currently. Manufacturers are increasingly aware of how technology can help them unlock the long-term value of the information they already possess, and augment those findings with additional data.
80% of manufacturers believe ‘Smart Factory’ technologies will improve their supply chain relationships
One of the areas manufacturers see the beneficial impact of digital technology most clearly is on their supply chain, helping to build trust and aid compliance, as well as foster greater collaboration and de-risk innovation.
Looking more inwards, a core benefit of digital technology highlighted was its ability to enable businesses to more easily monitor and act upon information flowing from connected machines, people and processes. Sensors pour data into onsite and increasingly cloud-based computers where it is collated and analysed to offer a moving real-time view of operations.
As positive as this all sounds, there are still challenges to overcome and doubts persist. Barclays’ latest report further examines UK manufacturing’s attitudes to digital or Fourth Industrial Revolution (4IR) technologies, from tackling productivity challenges to reducing costs and upskilling the workforce.
You might also be interested in visiting Barclays’ dedicated 4IR hub, which offers a host of free resources, including white papers, videos and infographics.
Something to consider
42% of manufacturers find government support services for industry confusing
Looking across the primary metrics of growth, i.e. GDP, balance of trade, the stock market and the Purchasing Managers’ Index (PMI), there does look to have been a noticeable cooling in activity of late.
That’s not to say manufacturing is contracting or that this is something to be deeply concerned about, but it points to the sector coming off the boil slightly compared to recent results.
Touring the country and speaking to business owners, there does appear to be more nervousness and caution out there – a sentiment that’s been talked about for a while, but is now starting to play out and manifest itself physically.
There is still the desire for growth and the investments necessary to achieve those ambitions, but seemingly not at the highest, ‘transformational’ level.
Something I believe could help alleviate that uncertainty and give executives the confidence to invest in the future, is further progress on the Industrial Strategy.
Released to great aplomb in November 2017, there’s been no real delivery yet. I, like many, remain keen to hear the details.
Further thought-leadership courtesy of Mike Rigby:
UK manufacturers must seize the opportunities of 4IR – 87% of UK manufacturing businesses express confidence for the future; but, why isn’t that confidence translating into greater capital investment?
What role is the UK playing in Connected & Autonomous Vehicles? – lifting the lid on how the UK is driving the future of mobility.
Holidays are over, so what now for UK manufacturing? – a timely discussion on why the government’s long-awaited industrial strategy is of such vital importance.
Will manufacturing mirror what’s happening in logistics? – Confidence among logistics operators is higher than last year, with a sense of opportunity surrounding the growing impact of digital technology and data.