The recently released EEF/Santander Investment Monitor found that manufacturers are moving forward with planned investments. However, due to uncertainty around demand and the UK’s future relationship with the EU, some manufacturers are putting larger, longer-term investments on hold.
However, as a partner that helps manufacturers plan for and secure investment for strategic projects, Santander has seen that companies which continue to make productivity, plant and machinery improvements are in a great position to compete globally.
How uncertainty is affecting UK manufacturing
Santander has relationship directors across the UK who work directly with manufacturers to listen to their challenges and provide support and advice where needed. The findings of the report very much chime with what we’re seeing on the ground. Our team has reported that uncertainty in the sector reached its peak immediately after the referendum.
After the initial shock of the referendum result, manufacturers now seem ready to search for potential growth opportunities.
But after the initial shock of the referendum result, manufacturers now seem ready to search for potential growth opportunities. Long-standing companies often realise that instead of holding on for better times for investment, the better times come when you start moving forward with your plans.
Partnering with manufacturers
One of the key reasons we partnered with EEF on the Investment Monitor is to really understand the marketplace and the challenges manufacturers are facing. This helps us to offer services that support their ambitions and allows us to work alongside them to see those ambitions through.
Santander has made working with UK manufacturers a major priority in the last few years. Not only do we have regional relationship directors who spend time with businesses, but we also deploy our risk experts into the field to tour factories and talk to manufacturing management directly.
We’ve worked with engineering businesses in the past few months who have had real difficulties, but have been able to provide personalised support to them to get them through challenging times.
We are also being more innovative and flexible with our product offerings. Our recently launched ‘tooling funding’ product allows businesses to free up cash while going through a product development cycle which often ties up funds and restricts growth, a challenge for many manufacturers.
Opportunities for manufacturers
While the report shows that risks abound, there is a wealth of opportunity on the horizon for UK manufacturers. From high speed rail to Hinkley Point and from Heathrow expansion to the Fourth Industrial Revolution, UK manufacturing should be on the front line to meet emerging demand.
In addition, Brexit provides an opportunity for companies to re-evaluate opportunities for new markets. That’s where Santander’s global network could really assist businesses in breaking into non-traditional markets.
There are certainly challenges, but as Investment Monitor demonstrated, manufacturers also have reason for optimism.