UK rivals China as top manufacturing growth nation

Posted on 14 May 2014 by The Manufacturer

Global manufacturing executives has ranked the UK alongside China as one of the top destinations for future sales growth, in a report published today.

In audit firm KPMG’s Global Manufacturing Outlook, the UK is placed joint second with China as a country where global companies expect to derive the majority of their sales growth over the next two years, beating the likes of Germany, India and Japan.

Of the 460 global executives surveyed, only the US (45%) bettered the UK and China’s tied score of 17%.

In a further boost to the UK, it ranked third (16%) as a country where companies expect profit growth over the next two years, coming behind second placed Germany (15%) and China, which scored highest with 18%.

Stephen Cooper, KPMG’s UK head of industrial manufacturing, said the news is encouraging for domestic manufacturers and is a reflection of the UK’s growing confidence.

“The UK economy overall is showing positive economic signs, while comparatively, some of our overseas competitors are on more shaky ground,” he said.

Mr Cooper cited the fact the UK has a higher profit growth forecast than Germany as a particularly interesting statistic.

“Germany traditionally has a reputation of being efficient in manufacturing processes, so one would expect them to rate perhaps higher than the UK as a naturally more profitable country for investors,” he said.

“The wider Euro crisis and European debt issues may still have a lag impact on Germany.”

The report also found that manufacturers were making moves to 3-D printing technology to reduce product development life cycles.

While 81% of global companies said that they were using 3-D printing in product development, this trend was even more marked with UK companies where 85% said that 3-D printing was used to speed up product development.

The survey shows innovation efforts were focused on enhancing existing product lines and services, with 71% of UK companies spending in this area, rather than on breakthrough innovation in which only 2% of UK companies put their efforts.

This fact was down to what Mr Cooper said was due to a lack of R&D funding, which was reported in the survey as being the top issue limiting the ability of companies to innovate, at 46%.

An even higher proportion of UK companies (62%) indicated R&D funding as the top challenge limiting innovation.

Mr Cooper added: “Perhaps the fact that the UK has only recently turned the corner in emerging from the recession has put a damper on recent commitment of UK funds to R&D, despite governmental incentives; UK companies may have felt the need for spend caution in the uncertain and recessionary markets of recent years.”