What challenges are manufacturers likely to face in 2023?

Jan 18, 2023
Author: Craig Burton
Craig acts as commercial partner for a wide range of corporate and non-corporate clients. He is also responsible for maintaining technical standards throughout the firm.
Manufacturing challenges

In 2023, there will be many challenges that manufacturers will need to overcome. Energy prices and inflation will be among the biggest challenges. Other challenges include:

  • Supply chain challenges
  • Increased transport costs
  • Less foreign investment


Energy prices

The impact of increasing energy prices on manufacturers is showing no sign of slowing in 2023. The new energy relief scheme, set to be introduced in April 2023 for non-domestic customers, is expected to increase planned reductions in staff and production. This is because manufacturers are prioritising investing in technology to improve the efficiency of their operations whilst also reducing costs and time spent on manufacturing tasks.

According to the 2023 Make UK/ PwC Senior Executive survey, 70% of manufacturers expect their energy costs to increase in 2023. 66% are expecting to reduce staff and production despite the government’s energy support package.


Supply chain challenges

In 2023, it is highly likely that global supply chain issues will remain whilst the conflict in Ukraine is ongoing. Sourcing and purchasing materials and fulfilling and distributing orders will remain to be a key issues for manufacturers in 2023. Supply chain issues are one of the main reasons why manufacturers are investing in digital technology. Digital technology such as VR & AR allows manufacturers to design products with little to no wastage, allowing manufacturers to be more efficient with their usage of materials.


Increased transport costs

Due to the increased costs of fuel in 2022, transport costs for manufacturers have increased dramatically which makes exporting goods more expensive which is eating into profit margins. Manufacturers will need to review and optimise their transport costs. For example, ensuring that HGVs and shipping containers are full to make the most of their transport costs.


Investment opportunities

Due to the political turbulence in 2022, 43% of companies believe that the UK is now less attractive to foreign investors. Therefore, those manufacturers that are looking for an investment may find it more difficult to find a suitable investor. This could prove to be a significant challenge for UK manufacturers that named investing in deep tech solutions and a commitment to innovation as their top priority in 2023. Some manufacturers may require investment in order to achieve this.



To conclude, inflation, energy prices, supply chain issues, transport costs and fewer investment opportunities will be the main challenges that manufacturers will look to overcome in 2023.

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Craig Burton

Partner, Sheffield


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