Without being able to get products to market, manufacturing is nothing. Efficient, highly-developed and well integrated transport networks lower the cost of doing business, help attract inward investment and provide access to international markets – critical for manufacturing, an export-intensive sector.
One of the main recommendations as part of our recent transport report was for public investment in transport to reflect the needs of the economy. It highlighted the importance of the road network to manufacturers and the need for greater investment in maintaining roads and strategic investments to reduce congestion and bottlenecks.
The road network is critical for manufacturers
In our survey we asked manufacturers about the criticality and importance of each transport mode to their company, the results are set out in Chart 1. Over 99% responded that the road network is either critical or important to their business compared to a similar figure for aviation of 73%. This wasn't a surprise in 2010, the road network accounted for 70% of freight movements, while rail accounted for just 10%. Nor will this change anytime soon, a recent report highlighted that just a 10% shift from road to rail would completely overwhelm the latter.
82% of manufacturers rated the road network as critical to their business, 43% ports, 30.8% aviation and just 3.3% rail.
Chart 1: Criticality and importance of each transport mode to manufacturers
Diving deeper, the small number of manufacturers who said aviation is critical to their company already have a strong positive rating of the aviation network rather than a negative one. This contrasts with the responses from manufacturers who said the road network is critical to their business, where a positive rating of only 14.3% was achieved.
Chart 2: The rating given by manufacturers for each transport mode, filtered by those who view each mode as ‘critical'
Not only are roads critical to manufacturers, but their view on the existing road network is not a good one.
Given this it is unsurprising that when asked 62% of manufacturers said that if they had the choice, investment in the road network would be their priority.
The impact on manufacturers of a poor road network include delays in receiving goods and sending orders, increased operating costs, greater customer dissatisfaction and a loss of productivity.
What parts of the road network should be prioritised?Again drilling down to manufacturers who already tell us the road network is ‘critical' to business success; we asked “How important is investment in the following aspects of the UK's road network for your company's growth?” Looking at the responses, Motorways and Major A Roads come out on top, i.e. the strategic road network managed by the Highways Agency.
There is estimated to be a £10bn funding gap for Highways Agency projects.
Chart 3: Importance of investment in parts of the road network
Making strategic interventionsMaintenance is often overlooked in the debate with the focus being on new road building. But, as Eddington reminded us in his transport study
“the key strategic economic challenge is to improve the performance of the existing network”.
The UK road network is incredibly congested; each kilometre of motorway carries more freight than any other major economy except Japan. In addition the state of the road network continues to deteriorate, asked how much it would cost to bring their road networks up to scratch, over committed spending, local authority highways departments estimated on average £60m each, a shortfall across England and Wales of £10.5bn. This figure is also heading in the wrong direction; in 2012 the comparable figure was £9.8bn.
Tackling bottlenecks and improving road conditions would deliver for manufacturers, in a significant way, helping to turn the march of the makers into a strong drive. Compared with the other major infrastructure spending planned for other transport modes, the upfront cost would be considerably less and deliver higher returns. The Government has recognised the value of this and has provided some funding through the Growing Places Fund and Local Pinch Point Funds. The forthcoming Spending Review will test the Government's commitment to this agenda. Longer term all options must be considered to help plug the road funding gap, including road user charging.