Manufacturing outlook – challenges and opportunities

Sep 9, 2015
Author: Chris Hill
Chris is the firm’s Senior Partner who acts for a wide range of clients. Chris specialises in advising manufacturing and engineering businesses.
Manufacturing SME's

Welcome to our manufacturing outlook 2015/16.

Manufacturing remains one of the key sectors within the UK and I think it’s fair to say we should be upbeat about the future. The picture remains largely positive and it is not particularly surprising that so many manufacturers across the UK are quite optimistic about the future, albeit if a little more tentative than six months ago.

Challenges – skills, finance, productivity and exporting

That increased hesitance in confidence is not surprising either. Today, in an environment which is changing faster than ever before we are seeing a vast array of challenges across the sector. Those of particular note are the shortage of highly skilled and qualified workers, difficulties in accessing finance – particularly for the SME manufacturers, falling productivity and the uncertainty over the future of the Eurozone which, in conjunction with a strong pound, is adversely impacting exporting.

Each challenge has a different impact within the sector as the day-to-day operations, processes and supply-chains vary considerably on specific individual business factors. They have all, however, contributed to the slower start to 2015 than initially anticipated.

Opportunities – innovation, technology and growth

Nevertheless, the manufacturing sector is still growing and it is encouraging to see that, despite a slowdown, manufacturers remain fairly confident and are looking towards the future. Innovation and R&D remain a key strategic focus for many manufacturers and there are significant opportunities here in terms of supply-chain efficiencies, customised manufacturing, cost-efficient production, improved environmental footprint and greater flexibility. We spoke about 3D printing in a previous article and how that can aid the manufacturing process, and this is just one example of how technology can drive growth in the sector.

Running parallel to this, the Government has introduced a number of generous tax incentives to help UK manufacturers – multinationals and SMEs alike – to research, innovate and grow. Two big potential tax-saving opportunities here are R&D tax relief and the patent box, which are both widely available and very advantageous.

One of the key outcomes manufacturers will be striving for over the next 12 or so months will be to ‘keep ahead of the game’ and mitigate the complexity and financial costs of meeting ever-changing customer demands. Technology that continues to modernise manufacturing and bridge the gap between customer demands and cost-efficient supply will certainly remain high on the agenda.


Looking ahead

With the drama and uncertainty of the General Election (and subsequently the Summer Budget) behind us, we can now focus on the future of manufacturing. With innovation and technology set to drive the sector let’s hope output continues on an upward trend.

More from our manufacturing experts

You can find all of our latest manufacturing sector news and newsletters here.

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Chris Hill Senior Partner

Chris Hill acts as commercial partner for both corporate and non-corporate clients and has worked for Hawsons throughout his career. For more information or advice on anything covered in this article, please contact Chris on or 0114 266 7141.