Manufacturers identify plant and product development as priorities for 2013
MANUFACTURERS have said investment in machinery and new product development are their main priorities for the next 12 months.
The Annual Manufacturing Report, produced in association with Barclays, also claims almost half (46%) of firms questioned were “quite optimistic” about the economic prospects for UK manufacturing this year.
The report, which details the responses of more than 100 manufacturers each year, said there were signs of increased confidence in the sector, with a considerable increase in companies seeking to spend more on investment activities.
It said UK manufacturers were maintaining their strong focus on research and development in order to create new products. Over a third questioned (36%) plan to increase spending in this area in 2013, and more than half (62%) of UK manufacturers will spend over £100,000 on machinery and tools this year.
Only 2% of companies reported an intention to spend less on new product development over the coming 12 months, which the bank suggested showed manufacturers were looking to couple new product development with investment in new equipment to bring innovation to the marketplace.
Mike Rigby, Head of Manufacturing, Transport and Logistics at Barclays said: “There is a clear overall improvement in confidence compared to last year, which coupled with the increase in planned investment spend, is very encouraging to see. There is however still concern around future prospects as the economic outlook continues to be challenging, but a focus on R&D and innovation can only mean good things for the sector.”
There appears to be a general trend amongst UK manufacturers to increase the amount of business they are conducting overseas. In this year’s report, 35% of companies state that they conduct 20% or more of their business offshore while 37% state they plan to increase offshore activity.
When it comes to offshore production, 11% report that it is “very likely” that part of their manufacturing production will move to a low cost economy over the next 12 or 24 months and 17% reporting that it is “quite likely”. This is in contrast to 5% that intend on returning their production to the UK.
Looking at supply chain integration, 53% of manufacturers plan to increase investment in supply chain integration over the next 12 months, while no companies expect it to decrease. It said this showed manufacturers had realised the long-term gains to be had from developing better relationships throughout the supply chain.
“It is not surprising to see UK manufacturers focus on new markets as they look to benefit from faster growing territories. This will also provide them with diversified income sources and wider opportunities for the application of their intellectual property,” added Mr Rigby.
