Manufacturers gearing up to meet 2017 challenges head on
UK manufacturers expect 2017 to be another year of risks, but are gearing up to hit its challenges head-on, according to a new survey by manufacturers’ organisation EEF.
The organisation’s annual Executive Survey found that while almost half of companies (46%) see more risks than opportunities in the year ahead, the sector is far from apprehensive.
Instead, UK manufacturing is striding into 2017 with firms focused on delivering ambitious growth plans and feeling positive about productivity, employment, investment and sales for the year ahead.
EEF said manufacturers were realistic about the challenges ahead, but appeared to be quietly confident about conditions in their industry. However, the same could not be said of broader conditions.
It said while a quarter of firms (25%) expect UK economic conditions to improve, these are outpaced by those steeling themselves for a decline (47%). The view is similar when it comes to global economic conditions, where 24% anticipate improvement and 36% predict deterioration during 2017.
Nevertheless, this more pessimistic outlook does not taint manufacturers’ views of their own future performance, with many still expecting to pack a punch. In the year ahead, an impressive 56% of firms expect to increase their productivity, while half (50%) expect to boost UK sales.
There is also good news on the export front, where more than four in ten firms expect to see improvements in volumes – 43% in non-EU and 41% in EU exports. Permanent employees and investment levels also look set to be stepping in the right direction this year.
According to the EEF, these predictions are not empty pipe dreams either – they are firmly grounded in manufacturers’ business plans and growth strategies. Despite, or perhaps because of, the unpredictable economic conditions, firms remain focused on long-term and broad-based actions.
It said their priorities and direction of travel was clear – 56% intend to increase productivity through process innovations, while half (50%) are aiming to increase investment in technology and innovation. As well as looking towards Industry 4.0, more than four in ten (44%) will be working with suppliers and customers to ensure supply chain flexibility.
Other areas where strong efforts will be made include diversifying into new export markets (41%), brand and marketing (40%) and commercialising new technology and product developments (39%).
With ongoing weakness in global demand looking set to persist in 2017, manufacturers have placed diversifying into new export markets at the top of their list of challenges for this year.
Charlotte Horobin, interim Midlands and East Region Director at EEF, said: “Global political upheaval means that 2017 looks set to be another bumpy ride, with manufacturers forced to navigate uncertainty, unpredictable economic conditions and a number of risks that have been amplified by Brexit.
“Against this backdrop a smooth journey is far from guaranteed, but firms are strongly attuned to the challenges and remain fully focused and determined to deliver on their long-term plans for growth. With a new digitally-driven industrial era on the horizon and everything to play for, this long-term vision and focus is vital – despite the peaks and troughs manufacturers cannot afford to be diverted away from where they need to be.”
