'Bouyant' outlook for food sector
25 Aug 2015
Growth in the UK food and drink manufacturing sector is forecast to rise between 3-4% over the next few years, says a recent market report.
Research and Markets reported that the food and drink processing industry (FDMP) was outperforming other manufacturing sectors, and would reach a value of about £113.1 billion by 2018-19.
Its industry report, which analyses future construction activity in the sector, said: “Over the last couple of years, the FDMP sector has seen increased capital investment levels, reflecting the growing optimism in the wider economy.”
The industry is characterised by an ageing stock of manufacturing facilities and equipment and new projects are mainly focused on upgrading existing assets to achieve greater efficiencies, leading to higher outputs and lower costs.
Research and Markets
But in spite of upbeat predictions, some challenges were highlighted in the report.
“The industry is characterised by an ageing stock of manufacturing facilities and equipment and new projects are mainly focused on upgrading existing assets to achieve greater efficiencies, leading to higher outputs and lower costs,” it said.
This means upgrading and fit-out work would account for around 80% of total output in the sector.
It said over 8,000 companies were active in the FDMP sector across the UK, with about 400,000 workers, making it the largest manufacturing sector in the UK.
From this, over 85% of enterprises qualified as small, but the top five UK food companies accounted for over £30 billion in terms of turnover, with the top 20 food producers operating over 300 manufacturing and distribution sites across the UK.
This brings the total number of manufacturing sites to over 9,500, with the bakery, meat processing and dairy industry operating the largest number of processing sites, according to the report.
Scotland, the North West and Yorkshire and Humber have the highest concentration of food processing activity, and going forward, it said construction output in the food processing sector was likely to remain relatively buoyant, mainly driven by renovation and maintenance activity.
This activity will result in construction output of between 3-5% over the next few years to reach a total of around £475 million by 2019, the researcher forecasts.
