Manufacturers look to Government for practical support

19 April 2013

Three quarters of manufacturers believe the right strategies are not being adopted to develop the sector.

Research by accountants and business advisors BDO LLP reveals that just 26% of manufacturers believe the Government is adopting the right strategies to support and develop UK manufacturing.  Almost all (93%) of manufacturers value the Government’s message that manufacturing is essential to the UK economy, but the research indicates they do not see policy pledges translating to concrete change.   

The findings are drawn from BDO’s Manufacturing the Future, one of the largest surveys to date of the engineering and manufacturing communities, whose views jar with government messages around the importance of the sector to rebalance the economy. 

Looking ahead, three quarters (73%) of manufacturers predict overall improvement in the economic outlook, but more than half (51%) are not confident that manufacturing will be a core sector of the UK economy in 10 years’ time.  Nearly half again (44%) anticipate no increase in the sector’s share of GDP, suggesting the sector is conspicuous by its absence in supporting long term growth, despite government messages to the contrary. 

Tom Lawton, Partner and National Head of Manufacturing, BDO LLP, comments: “If there’s one overriding message we’re hearing from manufacturers, it’s that words are not enough.  Our research suggests that policy pledges amount to empty rhetoric, not concrete change.  Optimism for longer term economic growth is encouraging, but it’s worrying that manufacturers don’t envisage they’ll have a significant role in achieving it – especially given the government’s insistence on the sector’s importance to the rebalancing of the economy.” 

In addition, manufacturers have identified specific challenges and called for change.  More than half (54%) told BDO that the UK manufacturing sector cannot achieve a strong position in 10 years’ time if the focus remains on banks as sole funding providers.  Crucially, more than two thirds (69%) think the Government should establish an 'industrial bank' with the specific goal of supporting the manufacturing sector. 

BDO’s Tom Lawton continued, “We need longer term strategies that go beyond the term of a single parliament in order to rebalance the economy towards manufacturing. The sector operates on a global stage with countries such as Germany, Japan and China which have all built sustainable, long term manufacturing sectors at the centre of their economies, underpinned by firm and committed government support.  The UK needs to do the same, or we risk losing our manufacturing base altogether.”   

As part of BDO’s Manufacturing the Future report, manufacturers outline their wishlist for government support to expedite growth, calling for: 

  • the establishment of an industrial bank;
  • a revamp of the education system to develop the skills needed for the sector;
  • more patriotism when awarding large UK Government-funded contracts;
  • a more supportive tax system
  • more innovation from government in providing funding support to the sector (to provide an alternative to the banks);
  • more focus on exports to BRIC, CIVETS and other emerging economies to reduce export dependence on the Eurozone.

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Note to editors

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Methodological Notes

BDO has compiled one of the largest surveys to date of the engineering and manufacturing community. Nearly 1,500 engineers and manufacturers responded to the survey which has helped to build a powerful assessment of the current state of manufacturing and, more importantly, the actions needed to make manufacturing a key part of the economy for the next decade.

The survey covers four strategic areas: the economy and the role of manufacturing in the economy, the importance of Government in enabling growth in manufacturing, access to funding and sustainability and its implications for the cost of energy.