UK to lose competitiveness over next five years, says Deloitte

Posted on 19 Nov 2012

The UK is predicted to drop from the 15th most competitive nation today to the 19th position in five years’ time together with several other European nations, according to the 2013 Global Manufacturing Competitiveness Index report by Deloitte.

Over the next five years, 20th-century manufacturing stalwarts like the United States, Germany and Japan will be challenged to maintain their competitive edge to emerging nations such as India and Brazil.

The report confirms that the landscape for competitive manufacturing is in the midst of a massive power shift – based on an in-depth analysis of survey responses from more than 550 CEOs and senior leaders at manufacturing companies around the world.

The 2013 Global Manufacturing Competitiveness Index once again ranks China as the most competitive manufacturing nation in the world both today, and five years from now.

Germany and the United States round out the top three competitive manufacturing nations, but, according to the survey, both fall five years from now, with Germany ranking fourth and the United States ranking fifth, only slightly ahead of the Republic of Korea. The two other developed nations currently in the top 10 are also expected to be less competitive in five years: Canada slides from seventh to eighth place and Japan drops out of the top 10 entirely, falling to 12th place.

David Raistrick, UK Manufacturing Leader at Deloitte, said: “America and Europe have continued to watch emerging markets mature and become formidable competitors over the past decade. While the UK is currently still performing very well against its global competitors, it will struggle to keep up the rapid pace of innovation, development, growth and investment expected from emerging countries such as Brazil and India.”

According to Mr Raistrick, a key barrier for the UK specifically is around energy cost and policies. “If the UK is to improve its competitiveness globally, we need to invest not only in a skilled labour force, but also need to ensure the UK has a credible energy policy. This will inevitably mean nuclear must be a real option,” he said.

In five years Brazil will jump from its current eight place slot to third place and India from fourth to second place. China remains firmly in first place. While the Americas region will continue to show significant manufacturing prowess – with the United States, Brazil, Canada and Mexico all in the top 15 most competitive nations five years from now – many advantages are tilting toward Asia, which will have 10 of the top 15 most competitive nations within the decade.