As we have seen on the blog this week, manufacturers do not see the challenging economic environment dissipating this year.
In 2015, companies had to be proactive about creating opportunities for growth and this is certainly something that will come to the fore again in 2016 albeit coupled with some more tough decisions for some firms.
- Manufacturers are proactive about creating opportunities for growth
- Growing exports a key priority, but also a key challenge
- Working with customers and suppliers remains important for visibility
- There will be some tough decisions for manufacturers on the table
No silver bullet
In this year’s EEF and Aldermore Executive Survey, no one action stands head and shoulders out from the rest as the ‘silver bullet’ to address the risks that companies expect to face in 2016. Instead, companies are prioritising a range of actions, some of which will go hand-in-hand with each other, aimed at ensuring their business prospects are better than the economic prospects.
Manufacturers’ top priorities for the year ahead are to:
- increase their investment in technology and innovation
- to sell into new export markets
The two are also closely linked, as our Innovation Monitor survey earlier this year showed, over half of manufacturers said that their reason for innovating was to increase sales into new export markets.
41% - the proportion of firms citing increased investment in technology/innovation as a priority in the year ahead
Working with customers and suppliers always features high on manufacturers’ lists of priorities and 2016 will be no exception; 37% of manufacturers say that this will be a priority in the year ahead.
Not all of manufacturers’ activities in the year ahead will be focused on finding growth opportunities, some will be on reducing costs and improving organisational efficiency. Organisational restructuring is a priority for 35% of manufacturers in the year ahead, and 31% are planning across the board cost-cutting.
Despite the increased concerns about risks building in 2016, increased monitoring of risks features bottom of the list of manufacturers’ priorities in the year ahead. However, with 16% of companies saying this will be a priority, this is little-changed from when we asked a similar question at the start of 2014.
Broad-based efforts to stand in good stead
All of this shows that manufacturers are making a broad-based effort to boost their growth opportunities and mitigate exposure to risk, in what is expected to be a challenging year with a myriad of risks and a pessimistic global outlook. Manufacturers are taking action to place their businesses in good stead to withstand whatever the year may bring.