Manufacturers missing out on £10bn investment potential

24 April, 2024

Such a boost would raise the investment potential of the sector overall by up to a fifth and help address the UK’s long-term productivity weakness. Furthermore, the report shows that more than a quarter of companies (26%) would increase their investment by up to a fifth if access to finance was improved, while more than one in ten (12%) would increase their investment by up to half. In particular, the report shows access to finance will be critical for companies’ investment plans in the next two years in critical categories such as capital equipment, automation, energy efficiency and cyber security. These investments are essential if the UK is not to fall behind in the race to net zero and in areas such as innovation and robotics.

However, the report also shows that barriers to finance remain, with more than half of companies (54%) unaware of the range of public sources of finance and government schemes tailored towards manufacturers. Furthermore, domestic economic and political uncertainty (58% and 42% respectively), together with the threat of increased costs (54%) is also deterring manufacturers from accessing finance in the next two years.

Commenting, Fhaheen Khan, Senior Economist at Make UK, said: “Access to finance is like fuel for manufacturers. Without it many manufacturers would be unable to make the continuous investments in capacity and innovation which are so essential in such a dynamic sector with an ever-changing external environment. However, there is currently significant investment which is lying untapped due to a lack of awareness among companies of the private and public options available to them. If we can unlock the options that finance provides then it will produce significant potential for manufacturers.”

Laura Capper, Head of Manufacturing and Construction at NatWest added: “Finance is fundamental to helping UK manufacturers unlock investment to grow, innovate or become more sustainable. In the face of constant significant challenge, the manufacturing sector has remained resilient, and businesses have continued to invest to ensure they remain future fit. Access to external finance is a key enabler to support these ambitions. That said, with such a broad range of options and providers available, choice can seem overwhelming. There is a real opportunity for greater engagement between manufacturers, lenders and other key supporters across the eco-system to collaborate to provide flexible funding and solutions to ensure future financial stability. At NatWest and Lombard, we look to continue to evolve our support to UK manufacturers to help businesses navigate challenges and seize opportunities.”