Against the odds: The future of UK manufacturing
Against the odds: The future of UK manufacturing
Top 10 risks in the next 12 months
Passing on costs reducing pressure With one eye on their margins, firms feel they have little choice but to pass some of these cost pressures on. When it comes to protecting and improving cash position over the coming year, just over two in five (42%) manufacturers told us they are planning to increase prices for customers and distributors, followed by extending terms with suppliers (31%) and – more positively – introducing or expanding the use of automation or AI in production (30%). A fifth (21%) are also planning to refinance or borrow money. Against this backdrop, we asked manufacturers how the government could best support their cost containment or growth in the Chancellor’s looming Autumn Statement. Given that energy costs are their biggest perceived risk for the year ahead, it’s no surprise that a reduction in VAT paid on energy consumption is top of their wish list (28%), followed by energy support measures ahead of winter (21%) and subsidies to support investment in onsite energy generation (21%).
Materials
How can manufacturers deal with price increases in an inflationary market?
Increased material costs
Availability of materials
25% 20%
People
Weaker demand from customers
Availibility of labour
18% 18%
Supply chain
Increased import/ shipping costs Supply chain delays/uncertainty
17% 17%
Operating
Increased energy costs Increased property costs
32% 16%
Finances
Increased wage costs Increased borrowing costs
17% 17%
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