Manufacturers say UK can exploit global process industry equipment demand
16 Apr 2018
The UK’s specialist mechanical equipment industry is well placed to exploit its sector’s continued global growth, says a new report.
Manufacturers’ organisation the EEF and Santander UK’s joint report on its prospects says long-term growth will depend upon adaptation to intelligent manufacturing, the fourth industrial revolution and expanding demand for renewable energy.
In the shorter term there are also business opportunities arising from increasing global demand for equipment and the use of new business models such as leasing hire.
Last year, the sector in the UK generated £33 billion from exports and since 2000 it has seen foreign demand for its goods increase by almost a half (46%).
However, Britain’s specialist equipment manufacturers have seen their trade position deteriorate as overseas competitors have increased their market share.
Policy makers must continue to support this vital sector by ensuring the UK business environment is cost competitive, trade links are retained and the longstanding productivity issue is addressed
Martyn Jenkins, economist, EEF
Martyn Jenkins, economist at EEF, said: “The success of the sector in continuing to evolve its production processes in the digital age, as well as seek out new markets abroad, stands it in good stead for the future.
“That said, policy makers must continue to support this vital sector by ensuring the UK business environment is cost competitive, trade links are retained and the longstanding productivity issue is addressed.”
The report points out that foreign trade is essential, given that more than half of all UK firms in the sector are classified as either an importer and/or exporter of goods and services. This is notably higher than the manufacturing average of 33.5%.
Almost 50% of all demand in the mechanical equipment sector derives from overseas sales, making it one of the most export intensive.
The report notes that overall the international global construction equipment market is predicted to grow to $180.7 billion in value by 2021.
Clean growth strategies, aiming to reduce greenhouse emissions by 80% by 2050, will create larger demand for renewable energy technologies and equipment such as hydro?electrical turbines, fuel cells and biomass systems.
Balancing the need for the best and most efficient equipment against budgetary constraints means that, for many companies seeking to modernise, leasing offers a more viable purchase model. Larger equipment providers should seek to exploit this with leasing plans to boost business, advises the report.
