A new study has revealed over half of UK manufacturing companies questioned are considering switching to renewable energy sources.
The Close Brothers study, which questioned 400 manufacturers, comes as the government predicted an increase of as much as 50% to the electricity prices paid by the manufacturing industry by 2020.
Steve Gee, managing director of the manufacturing division at Close Brothers Asset Finance, said: “Seven in 10 of the 400 manufacturers we surveyed admit they are already very concerned about the current impact of energy costs to their business, and that’s before you factor in any future rises.
“Almost half said increased energy costs are squeezing their margins and one in five said it means less cash to invest in their business.
“Our research shows that 55% of manufacturers polled plan to expand operations in 2014, but the concern is that these ambitions may not be achieved if rising energy prices put pressure on cash flow.”
The survey also shows that to counteract the proposed rises, two in five companies would employ leaner manufacturing processes.
An additional 16% would make staff cuts, while 18% remain undecided on how to address the increase.