There are plenty of reasons for UK manufacturers to be cheerful in these challenging times, said EEF's chief economist, Lee Hopley, during her keynote at The Manufacturer Leaders Conference this morning.
Lee Hopley offered a reflection of the past 12 months and a look ahead at some of the key economic trends in the coming year which may influence manufacturers’ investment decisions.
Shaking the immediate effects of last year’s vote to leave the European Union, UK manufacturing has demonstrated a strong performance for the past four quarters, with growth across all four metrics – output, orders, employment and investment, the economist noted.
This has translated into a rise in confidence regarding future business prospects. However, there is a gap between how confident managers feel about their business as opposed to that felt towards the UK as a whole. Though, naturally, there is a tendency to be more secure about that which you can directly control.
UK manufacturing isn’t experiencing this growth in isolation, manufacturing is growing globally – particularly the US and Eurozone, following a period of subdued performance, Hopley continued.
Lee Hopley was speaking at The Manufacturer Leaders Conference which is co-located with Smart Factory Expo and is taking place this week at Exhibition Centre Liverpool.
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However, her sense of optimism faded somewhat when it came to look at investment intentions, which aren’t running at the same levels as other metrics. “The appetite is positive, but more subdued than we’d like to see considering recent growth, possibly a result of continued uncertainty around Brexit,” she added.
That would be fine if the rest of the world faced the same challenge, but they aren’t. Competitive nations are embracing new digital technologies at significantly higher levels than the UK – something of a flashing ‘amber light’ on our national dashboard.
“The US and Eurozone are experiencing the simultaneous rise in global demand and business fortunes, and are investing as a result. History tells us that we don’t want to be left behind playing catch-up,” Hopley warned.
So, what can the UK do? It’s vital that we foster a culture of innovation, Hopley said, drawing on the rich knowledge, experience and resources present in our supply chains, science base, research centres and education and training system.
She also highlighted the need for strong leadership, and urged manufacturers to reconsider the role of IT in their business.
“There is a cost to delaying decisions in this very important area; the UK can’t afford to hit the pause button for very long,” Hopley concluded.
