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The 2021 outlook for the manufacturing industry

The outlook for 2021 is clouded for manufacturers, with concerns regarding the new trading relationship with the EU and the attractiveness for investment and talent sourcing.

According to Make UK and PwC’s Building Agility in Manufacturing 2021 survey, a third of companies believe investment prospects will decrease having left the EU, and over 25% believe exports to the EU will fall. A third also believe the ability to attract international talent will decrease.

Make UK’s Chief Executive Stephen Phipson reasoned that despite the trade agreement, the transition to new trading arrangements with the EU was always going to be the biggest challenge facing manufacturers this year.

The survey respondents felt that the biggest risk in 2021 is to be customs delays, followed by national and local lockdowns, and increased costs of meeting EU regulation.

However, there is positive outlook. Since the pandemic, manufacturers are already demonstrating the agility required to navigate the uncertain trade environments. Almost 48% of companies surveyed said they see a significant or moderate improvement for manufacturing in 2021. This was echoed with over 50% believing the opportunities outweigh the risks, and 44% of the companies were expecting to increase employee numbers in 2021.

Investments in new product development, capital investment, personnel training and apprenticeships, result in 54% of companies expecting to see an increase in their productivity through the year. Furthermore, 25% of companies are looking to re-shore overseas activities and/or identify new or additional suppliers in the UK.

Operating in the temporary and permanent partitioning market, we saw the spike for social distancing-based applications in Q2 2020 as businesses looked to ensure effective and safe social distancing solutions were in place for workers. These applications included temporary welfare facilities and workspace screens and dividers. Our standard product portfolio has seen a steady increase during Q3/Q4 2020, returning to the levels experienced in 2019 – a positive indicator that the sector continues to perform well.

According to IBIS World (a recognised industry market insight tool) there are several key manufacturing sectors set for growth in 2021 including those in parts of the food, pharmaceutical, consumer hygiene and non-alcoholic drink markets. Some of the slowest growth sectors reported are in the alcoholic beverage, vehicle, and furniture manufacturing sectors.

Sources:
https://www.themanufacturer.com/articles/fears-new-relationship-eu-cloud-outlook-manufacturers/
https://www.makeuk.org/insights/reports/executive-survey-2021

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