UK manufacturers like inward investment
14 May 2014
A new poll from the IMechE finds that 69 percent of manufacturers think overseas investment into UK manufacturing is helping the sector.
As controversy mounts over Pfizer’s bid for Astra-Zeneca, new figures from the Institution of Mechanical Engineers (IMechE)and accountants and business advisers BDO LLP have found that the majority (69 percent) of manufacturers think overseas investment into UK manufacturing is helping UK companies, compared with just 13 percent who said it was damaging the sector.
The results are part of the annual Engineered in Britain 2014: Manufacturing a Successful Economy? report by the Institution of Mechanical Engineers and BDO LLP.
“While individual takeovers need to be appraised on their own merits, these results show that UK manufacturers are keen to see more overseas investment in UK manufacturing," says IMechE director of engineering, Dr Colin Brown. “UK manufacturing and engineering lies at the heart of a healthy economy and as long as these investments are being made to create UK jobs and exploit UK skills we should welcome them, as investments in the UK’s future.”
Tom Lawton, head of manufacturing at BDO LLP, says the positive view of overseas investment from UK manufacturers reflects a very successful and long history of foreign companies investing in the UK, bringing huge benefits to employment, skills, investment and the continued development of intellectual property. He points to the automotive industry in the UK as providing a "superb example" of foreign investment that has supported and then developed world leading manufacture, design and technology.
The report also highlights that manufacturers and the public are broadly divided over whether the uncertainty over the Scottish independence vote is damaging UK manufacturing, with 44 percent of manufacturers and 27 percent of the public saying it is having a detrimental effect compared to 47 percent and 28 percent respectively saying it was having no effect. In addition, 52 percent of manufacturers and 44 percent of the public think that uncertainty over the UK’s future in the EU is having a negative effect on UK manufacturing, compared with 36 percent and 20 percent respectively, saying it was having no effect.
The report also tests manufacturers' political views, and has found that there is far more trust in the Conservative Party than in either Labour or the Liberal Democrats when it comes to introducing the best policies to support manufacturing in the UK.
When manufacturers were asked which political party has the best policies to support UK manufacturing, the Conservatives proved to be the most popular, with 40 percent, compared to 5 percent who said Labour and 3 percent who said the Liberal Democrats. However, somewhat worryingly, 28 percent felt that no political parties had the right answers.
When asked whether the Government’s policies are helping UK manufacturers 41 percent of manufacturers and 34 percent of the public said yes, up from 26 percent and 19 percent in last year’s survey. When asked about specific policy areas, 58 percent of manufacturers said the Government was performing well on the economy, up from just 31 percent in 2013, while 26 percent of manufacturers said Government was performing well on manufacturing policy, which compares to just 17 percent last year.
However, while the results were broadly positive there was some scepticism about the feasibility of the Government’s target of doubling UK exports by 2020, with 64 percent of manufacturers polled saying this was unrealistic. Another area of concern was skills, with 89 percent of manufacturers polled saying that the UK is not producing enough engineers to sustain the UK’s future economic growth and 65 percent saying the Government is not doing enough with careers advice to promote science, engineering and manufacturing in schools.
More encouragingly, industry’s confidence in the UK’s manufacturing sector has surged over the past year. According to the study, 61 percent of the manufacturers said they were more confident about the future of manufacturing since the Government came to power, which compares to just 28 percent when manufacturers were asked the same question last year.
IMechE president, Patrick Kniveton sees the results of the current report as being very encouraging and says it's good to see optimism in a sector which had been overlooked by Government for so many years.
“A strong manufacturing base is crucial to building a resilient UK economy and it shows that Government policies to introduce competitive corporate tax rates, cut red tape and encourage R&D, are working," he says. “However, a shortage of engineers could hamper this sector’s future. It is hugely worrying that 89 percent of manufacturers polled said that the UK is not producing enough engineers and there is clearly much more that could be done to promote science, engineering and manufacturing in schools.
“Also, much more work needs to be done to turn Government ambitions to double UK exports by 2020 into a reality, such as boosting exports tax relief, more UK finance for exports and more relationship building with other countries through organisations like UKTI.”
And what of the star performers in the uK's manufacturing firmament? When asked what UK manufacturing sectors were set to see the highest growth in the next ten years, composite materials were seen as the most promising, gaining 85 percent of the manufacturers’ vote, closely followed by biomedical with 79 percent, construction with 73 percent and aerospace with 69 percent.
The Engineered in Britain 2014: Manufacturing a Successful Economy? report by the Institution of Mechanical Engineers and BDO LLP features surveys of 1,000 manufacturers and 1,000 members of the public to gauge opinion on the current status of UK manufacturing.
The public poll was carried out by ICM and the poll of manufacturers was carried out by MSS, both on behalf of the Institution of Mechanical Engineers and BDO LLP.
The full report can be accessed here.
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