The competitiveness factor

01 April, 2016

Indeed, improving competitiveness is a key priority for British manufacturing, with nearly nine in ten manufacturers looking to invest to improve efficiency and productivity, according to the latest Attitudes to Business Investment survey from UK asset finance provider, Lombard. The research – carried out on behalf of Lombard by Research Now involving interviews with 750 UK businesses with a turnover of £2 million to £25 million, including 100 manufacturing businesses – reveals some 87 per cent of manufacturers in the survey said they were investing to improve efficiency. Four in five manufacturers (80 per cent) are planning to invest to support export in 2016, while for a third (33 per cent) of manufacturers, export will be the main area of investment in 2016. There was also an acknowledgement of the need for Government support, with 70 per cent of manufacturers saying that they would like to see more done to encourage export activity, particularly when it comes to cutting red tape.

Ian Isaac, head of Lombard, believes it is very encouraging that UK manufacturers are taking an enterprising approach to the importance of investing to secure their place in the competitive global arena. He says the findings of the survey indicate that UK manufacturers are very aware of what they need to do in order to secure ongoing and sustainable growth. “Within their business plans, investment aimed at securing innovation, improving productivity and establishing strong export markets will continue to be fundamental to securing the future health of the UK economy,” said Isaac.

The Attitudes to Business Investment survey would appear to be very much in tune with what EEF The Manufacturer’s Organisation has found from its members. Lee Hopley, chief economist at EEF, believes it is the worst kept secret that the UK has a big productivity challenge. “We’ve lost a lot of ground since the financial crisis, but the UK has some real potential strength in its industrial sector, which historically has a good track record in delivering productivity gains,” he said. Hopley added that the need for a “laser-like focus” on driving through efficiency improvements, innovating and investing in new technologies is central to the business model of manufacturers, a fact confirmed in this new research. “While we see lots of concrete steps being taken by manufacturers to grow and be competitive in a challenging economic climate, it’s never job done,” he said.

To get manufacturing growth and productivity on a stronger trajectory Hopley wants to see more companies investing in major technological advances, a strong commitment to industrial strategy from government and finance providers working in partnership with industry to make investment plans a reality. The survey is indicative that many UK manufacturers recognise the importance of investment in innovation in order to drive competitiveness and efficiency and to meet the demands of the global marketplace. However, as Isaac remarks, it will be vital that the broader UK economy adopts this strategy of ongoing investment so that the UK continues to move forward.

Ed Holden

Editor