UK manufacturers positive about 2022 despite challenges

Jan 11, 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

A recent industry survey has shown that many UK manufacturers are optimistic that productivity and business conditions will improve in 2022. Despite the fact that many UK manufacturers will be facing many challenges such as:

  • Retaining staff
  • Inflation
  • Rising input costs
  • New importing and exporting rules regarding Brexit

The industry survey conducted by trade body Make UK and PwC found that 73% of UK manufacturers believe that conditions for the manufacturing sector would improve in 2022. Furthermore, 78% foresaw at least a moderate increase in productivity. It is important to note that the survey was carried out in November 2021. So ahead of the latest Omicron variant.

Despite UK manufacturers having a positive outlook for 2022, there are still many challenges the sector will face over the coming year.


Challenges for UK manufacturers in 2022


One of the main challenges, UK manufacturers will face in 2022 is retaining and recruiting staff with key skills and talent. In the current climate, this seems to be a challenge for most industries. A recent survey of HR leaders across a variety of business sectors has found that 77% of employers are struggling with recruiting and retaining employees. The most common reasons for employees leaving their roles were because they found better pay at another firm (76%) and a perceived lack of career opportunities at their current organisation (64%). With unemployment rates currently low, the power has swayed towards employees as companies now look to make improvements such as flexible and remote working to make their organisation more appealing to potential employees.


Overseas demand affected

Due to the new strict rules that came into force on 1 January 2022, the process of importing and exporting goods is now slower, more expensive, and less flexible. In addition to this, UK manufacturers believe that logistics issues and the uncertain situation regarding pandemic and possible restrictions have damaged export demand. International orders for British-made manufactured goods are down for the fourth month in a row. This decrease in demand overseas will be a concern for manufacturers over the coming year.


Supply Chain issues 

Importing goods from other countries will also be a challenge for UK manufacturers as new rules now mean that importers must make a full declaration on goods entering the UK from the EU or other countries. Traders can no longer delay this for 175 days. Furthermore, there will now be additional costs of around £300-£400 for importing each consignment into the UK. Therefore, manufacturers will need to rethink how they import goods cost-efficiently.


Despite these challenges, Make UK forecast growth of 3.3% for the manufacturing sector in 2022.


How can we help?

At Hawsons we have a dedicated team of manufacturing and engineering accountants at our offices in Sheffield, Doncaster, and Northampton. Our specialist team offers a wide range of services which are tailored to meet your individual needs. Our understanding of the issues faced by the manufacturing and engineering businesses means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.

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If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

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Craig Burton

Partner, Sheffield

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