The survey shows that after a very difficult few years through the pandemic and, the shock to energy prices, there are optimistic signs with companies more bullish about the prospects for manufacturing in 2024.
As a result, the majority of companies are seeing opportunities outweighing the risks to their business.
Critically, manufacturers are backing this belief with investment in new products, expansion into new markets and accelerating use of new digital technologies to improve their business.
The survey, however, also shows that manufacturers are wary of the prospects for both the UK and global economies, while significant challenges remain in the faces of increased energy and employment costs, as well as access to domestic skills.
According to the survey more than half of companies (52.7%) see the UK as a more competitive place to manufacture. This compares to just under a third (31%) in the same survey a year ago following the political chaos of 2022. Less than a fifth (16.6%) believe the UK is not a competitive place in which to manufacture.
Furthermore, almost a third of companies believe the UK is increasing its competitiveness against Germany and France (30.7% and 30.2% respectively) while more than a quarter believe the UK is moving ahead of Spain and Italy (29.3% and 28.3%). These figures are greater than those who see the UK’s competitiveness decreasing against EU rivals.
However, by contrast, the share of companies who believe the UK is losing competitiveness against the US, India and China dwarfs those who believe the UK is gaining.
The survey also shows manufacturers are bullish about their prospects for the coming year with more than four fifths (44.4%) believing that conditions in the sector will improve, while a fifth (20.5%) see conditions deteriorating. In addition, almost two thirds (62%) of companies see opportunities outweighing the risks this year while just 14% disagree.
However, by contrast, more than four in ten companies (41.5%) see the UK economy deteriorating in 2024 compared to just over a third (36.6%) who see it improving. A similar proportion (37.6%) see the global economy getting worse this year compared to just under a third (31.2%) who see it improving.
In the year ahead, more than half of manufacturers (52.7%) see opportunities in new products while more than a quarter (27.3%) are expanding into new markets and a similar proportion (26.3%) are net zero opportunities. Furthermore, digital technologies have the potential to boost productivity with almost three quarters of companies (71.2%) believing digitising operations will boost operational efficiency. In addition, more than half of companies (52.2%) see generative AI increasing the productivity of their workforce.
However, more than half of companies still see risks from increased energy costs (53.2%) closely followed by the impact of political instability (43.9%). More than two thirds (36.1%) are still seeing supply chain disruption while a similar number (35.1%) see lack of access to domestic skills as a risk.
