Following the release of the latest UK manufacturing PMI today (1 August), Andrew Matthews, partner at MHA, believes that as the era of pandemic support fades away we need a proper industrial strategy:
“Despite benefiting from government support during the pandemic, increased sales and profits have given way to an uncertain market, leading to downward revisions in growth projections. The shortage of skilled labour and rising borrowing costs are adding to the unease, prompting manufacturers to reconsider expansion plans.
“The best case scenario over the next year, for many businesses, will likely be maintaining turnover rather than growing it. The prospect of further interest rate hikes may force employers to make tough, cost-cutting decisions such as employee redundancies or pay freezes in an effort to protect their bottom lines.
“To instil confidence and drive crucial investments in areas like operations, automation, and green technology, the government must urgently implement a long-term manufacturing strategy. Encouraging incentives like Freeports and Investment Zones in under-represented regions could provide a vital boost to the sector.
“However, success hinges on effective collaboration between policymakers and the private sector. Despite the current economic environment, the government should grasp the opportunity to create a supportive environment for UK manufacturing allowing them to not only weather the storm but also flourish.”
www.mha.com