The latest Make UK and PWC Executive survey shows UK manufacturers are starting 2024 with increased optimism and a greater investment appetite to invest in digital technologies. We provide some of the key findings from the survey in this article.
Key findings
- The majority of British manufacturers (52.7%) perceive the UK as a more competitive destination for their operations, a significant increase from the 31% reported just one year ago.
- Consequently, manufacturers, confident in the opportunities that now surpass risks for their businesses, are substantiating this belief through investments in new products, expanding into untapped markets, and accelerating the adoption of digital technologies to enhance their operations.
- In the landscape of 2024, a notable 62% of manufacturers concur that opportunities outweigh risks.
- 71.2% of firms view the integration of these technologies as a means to boost operational efficiency, with over half (52.2%) recognising the potential of generative AI in increasing workforce productivity.
- Nearly one-third of manufacturers believe that the UK is gaining competitiveness against Germany and France, while more than a quarter assert that the UK is outpacing Spain and Italy.
- Looking ahead, striking a balance between human skills and digitalisation, as well as automation, will be pivotal in managing costs and determining strategic direction. With opportunities outweighing risks, growth plans in motion, and clear investment intentions, 2024 appears poised to mark the commencement of a genuine manufacturing renaissance.
Investment Appetite and Opportunities for UK Manufacturers
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To implement growth plans, companies recognise the importance of having access to people and skills. The survey shows there is a growing emphasis on upskilling and retraining existing staff for the year ahead, with nearly 60% of companies planning to invest in acquiring the necessary skills in-house.
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In second place, manufacturers identified opportunities in the expansion of their product portfolios, showcasing their role as key drivers of innovation in an era marked by the transition to a digital and environmentally conscious economy.
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Investing in digital technologies, such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT), holds tangible benefits for businesses. These technologies enable improvements in efficiency, emissions reduction, and the creation of novel products and services.
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Seizing the advantages of achieving net zero involves adopting new or enhanced manufacturing methods, enhancing energy efficiency, creating sustainable products, and optimising delivery services. These enhancements not only result in increased efficiency, improved quality, and reduced costs but also boost productivity and resilience while simultaneously reducing the carbon footprint.
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Manufacturers are strategically focusing on accessing new international markets and expanding their global reach by exporting goods and services. A significant 27% of companies perceive major opportunities in new international markets, with almost a quarter (23%) identifying prospects for exporting to previously unexplored countries.
Opportunities for Factory Digitalisation
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71% of firms agree digital tech will drive productivity in 2024. Manufacturers are investing in digital technologies more than ever before and reaping multiple benefits, including increased productivity, improved products, reduced waste, and labour efficiencies.
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In the coming year, around 44% of manufacturers plan to invest in new digital technologies.
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While doing so, manufacturers recognise it is more important than ever to be cyber secure, so the same number again plan to invest in cyber security. We know from wider Make UK research that the latter can be a barrier to investment in digital technologies: we are now seeing these investments made simultaneously.
- While automation, robotics and cobots may have found a firm place in some factories, it is the emergence of new smarter technologies that manufacturers are looking to take advantage of, with almost a quarter (23%) seeing key opportunities in leveraging digital technologies, such as the cloud and AI.
- PwC’s recent EMEA Cloud Survey shows that for the Industrial Manufacturing sector, 80% of all respondents have either:
- started implementing or have adopted cloud in many parts of their business
- have evolved their operating model already, or
- are all-in on cloud and have scaled it throughout the business.
- The survey found that cloud tech increased productivity for 36% of respondents - the second most measurable value created after enhanced customer service at 37%. Overall, half expect increased productivity over the next year.
- Manufacturers need to understand what digital tools are available if they are applicable to their specific type of manufacturing process, and what the strategic benefits could be for their business - to identify the route to value.
Digital transformation is reshaping business operations, providing avenues for cost savings and heightened efficiency. Manufacturers, leveraging digital tools and technologies, can streamline operations, cut down on waste, and eradicate inefficiencies.
Additionally, these digital advancements contribute to improved sustainability, aiding manufacturers in achieving their net-zero goals.
Summary
As businesses start 2024, it is evident from this survey that UK manufacturing is experiencing a significant shift towards a brighter future. There is a newfound sense of optimism supporting the sector, fuelled by its resilience to economic challenges and commitment to innovation in the face of adversity.
Smart technology and factory digitalisation no longer feel like they are out of reach for many manufacturers, but instead, present a way to raise their competitive edge on the global stage.
With the UK Government’s increasingly supportive policies off the back of the Autumn Statment, businesses are recognising the UK as a competitive and inspiring place to operate.
To read the full version of Make UK's and PWC's Manufacturing Survey 2024, visit the Make UK website.
We look forward to seeing what 2024 brings for UK Manufacturing.