Modern manufacturing is niche, encompasses cutting edge design and is customer focused. It includes services as well as leading edge production processes. At the core of the competitiveness of modern manufacturing is innovation, investment and a skilled workforce.
Companies’ increasing focus on these areas has ensured that UK manufacturing has risen to the challenges and seized the opportunities of globalisation, and secured the UK’s position as the world’s sixth largest manufacturer. But economic conditions are changing rapidly and manufactures face a new wave of challenges in both the short-term and into the future.
The sector must first navigate through the choppy waters of a global economic downturn. The fall out from the crisis in financial markets is now impacting on the wider economy, not just in the UK, but across the developed world. Manufacturers are grappling with retaining a skilled and adaptable workforce, dealing with significant shifts in demand and sustaining investment in core activities. All against a backdrop of tighter profits margins and growing uncertainty.
The actions of both companies and policy makers will be crucial in limiting the pain likely to be felt across the sector and in preparing for an eventual recovery. For companies, concentrating efforts on the factors that have underpinned growth in recent years will be essential. And policy makers must deliver the best possible business environment to support these efforts by minimising the cost and regulatory burden on business. Opportunities remain and UK companies need to be positioned to take advantage of them.
In the longer term, the UK can maintain its position near the top of the global manufacturing league table. UK companies can lead the field in developing solutions for our future challenges. The transition to a low carbon economy, a secure and cost-effective energy supply and something else will all require engineering and manufacturing-based responses. Rising to these future challenges provides further opportunities for UK manufacturers to cement their position at the heart of a successful UK economy.
Indeed the government’s recent Manufacturing Strategy recognised the contribution manufacturers make, stating that ‘a thriving modern manufacturing sector is central to the future success of the British economy.’ A rebalancing of the economy is now more important than ever. Lower interest rates and a cheaper pound will help smooth the passage through the current economic turbulence. But most important will be support to help manufacturers keep investing in new technology, innovation and skills over the coming year so that they can take advantage of the upturn when it comes.