Most UK manufacturers are aiming to grow their business

Jul 21, 2022
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.
UK manufacturers


According to a survey conducted by the manufacturing trade body Make UK, 52% of UK manufacturers plan to grow their business during the next five years by over 20%. If manufacturing output for UK GDP increased from 10% to 15% this year, this could result in an additional £142 billion for the UK economy. This highlights how important the manufacturing sector is to the UK economy.

In this article, we discuss some of the areas where the manufacturing sector should be supported in order to achieve its growth plans. These areas include incentives for investment, building a larger workforce and local industrial strategies. 


Incentives for manufacturers to invest

In a recent survey conducted by Make UK, manufacturers were asked to pick the top three initiatives that would help them grow their business within the next five years. Incentives for investments came out first in the survey with 46% of UK manufacturers believing that greater investment opportunities would help them to grow their business.

Accessing finance

To enable manufacturers to invest in areas such as digital technology, industrial decarbonisation, innovation and staff they will need access to finance. However, the current economic climate is presenting difficult challenges for UK manufacturers that will be struggling to find the capital available to invest. Manufacturing trade body Make UK believes that the government should implement lending market interventions during this difficult economic period, such as the Recovery Loan Scheme implemented during the pandemic which ended in June 2022. Extending this kind of scheme would enable manufacturers to access the finances they need to grow and invest during a challenging economic environment.

Investment incentives

In order to help manufacturing businesses grow they will need the right incentives to invest. The UK government has introduced schemes such as The Super-Deduction and the Annual Investment Allowance to provide incentives for investment. However, exclusions tied to The Super-Deduction such as leasing means that it has not been as accessible to all manufacturers. The Annual Investment Allowance is a much more accessible scheme. If the government wants to encourage longer term investments, then they will need to increase investment confidence. This could be achieved by making the increase in the Annual Investment Allowance permanent and extending The Super-Deduction scheme further than March 2023.



Investment for manufacturing apprenticeships – building a larger workforce

28% of manufacturers said that greater investment in apprenticeships would make a huge difference in their ability to grow. For decades the manufacturing sector has championed apprenticeships. However, since the introduction of the Apprenticeship Levy in 2017, apprenticeship numbers have started to fall in the manufacturing sector. This levy was designed to have a positive impact on the sector. Unfortunately, it appears to have done the opposite. The government has hinted that they will look to reform the levy, but more fundamental change is required. For example, employers should be given more flexibility on how they can spend the Levy funds. Furthermore, it has been suggested that the government should investigate the components surrounding the levy such as how employers and providers are incentivised to deliver training. Addressing these issues will help the sector develop the skills needed to achieve long-term growth.


Local manufacturing industrial strategies

27% of manufacturers said that support with local industrial strategies would help them grow their business. An important factor of a long-term manufacturing strategy is providing decision making power to local leaders. Manufacturers surveyed said that any public funding they receive should be allocated by the City Regional Major (25%) or Local Councillors (22%).

To ensure the growth of the manufacturing sector over the next five years, devolution will be an important element in achieving this as local challenges will need to be overcome with local solutions. Therefore the government should listen to manufacturers and give more responsibility to local leaders to make important decisions regarding any levelling up funding or schemes in local areas.



To conclude, manufacturers consider the following three areas as the most important to develop in order to achieve growth in UK manufacturing:

  • Incentives for investment
  • Building a larger skilled workforce
  • Local industrial strategies

In order the incentivise long-term investment the government should extend The Super-Deduction and make temporary increases to the Annual Investment Allowance permanent to give manufacturers long-term investment confidence. To build larger workforces, the industry believes that the government should reconsider how employers and training providers are incentivised to provide more training. Finally, the manufacturing sector believes that more local strategies are needed to help the UK manufacturing sector grow nationally.

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Craig Burton

Partner, Sheffield

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