Challenges for the sector
While the challenges have been significant, UK manufacturers have been enormously resilient and adaptable following a wave of macroeconomic and geopolitical issues.
a severe loss of revenue, to those who experienced a COVID bounce, both of which are impacting working capital requirements. These challenges have come alongside an increasingly critical ESG agenda. Capital structure and debt facilities have and will always remain a key ingredient to success, but the talent from C-suite to ‘on the tools’ production will remain critical to the long-term success of the sector within the UK, which remains the ninth largest manufacturing nation globally. Shortening supply chains, consolidation and vertical M&A may all feature more frequently in the 12-months ahead. George May Managing Director - Asset Based Lending at Close Brothers
Many of these challenges in isolation will have resulted in significant operational, working capital and profitability issues, but the collective impact has been enough to even challenge the top tier operators. We can look back on decades of support to the manufacturing sector across our Asset Based Lending and Asset Finance businesses, but it is difficult to compare and contrast against equivalent headwinds, from supply chain disruption and soaring input costs, to rising energy and interest rates, and increased leverage, following the seismic debt support from CBILS and other related loans.
We’ve also seen COVID-19 nuances; ranging from suffering
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