Industrial strategy will boost UK reshoring, say Make UK/RSM survey responders
23 Oct 2024
Announcement of the Government’s long-term industrial strategy will revive the country’s offshore manufacturing production, believe a majority of respondents to the new Make UK and RSM UK annual investment landscape survey.
Almost three quarters of companies (70%) state that re-shoring will increase as a result of the policy, with greater facilities, automation and R&D investments, plus renewed emphasis on increasing EU-bound exports.
Mike Thornton, head of manufacturing at RSM UK, added: “It’s clear the impact a comprehensive, forward-looking strategy will have on manufacturers. Rather than lagging behind the UK’s economic recovery, strategic clarity will unlock growth, innovation and even kickstart a re-shoring bonanza - creating jobs, boosting key business and infrastructure investment and improving productivity.”
According to the survey: half of companies would increase investment in existing facilities in the UK; almost a third (30%) would increase automation and exports to the EU (29%); and more than a quarter (26%) would boost R&D. Just 1% of respondents claimed the industrial strategy would not impact their businesses.
Results from the survey, conducted with 209 companies between 27 July and 21 August, also challenged the common assumption that UK firms made less investment in their companies than overseas rivals. UK plant and machinery investment of 8.7% ‘investment intensity’ was nearly double the 4.7% achieved by those foreign competitors used for comparison. And UK R&D investment of 5.5% exceeded the 5% recorded for foreign firms.
Regarding the impending Autumn Statement, more than half of companies (56%) said reducing corporation tax would have the biggest positive impact on investment, followed by expansion of capital allowances to software (53%) and extension of full expensing to leased and second hand machinery (46%). Almost a third of firms (30%) said high interest rates were their biggest obstacle to raising finance.
Plant and machinery, together with labour, topped respondents’ investment priorities for the year ahead. Meanwhile, almost two thirds of companies (64%) said they invested up to 10% of their turnover in plant and machinery, with a further quarter (26%) investing between 10% and half of turnover. Additionally, some three quarters (72%) stated they invested up to 10% of turnover in R&D, while almost one in five (18%) invested between 10% and 50%.
Make UK used the survey publication to demand the chair of the Industry Strategy Council announce the composition of its sector sub-groups as soon as possible. It added these should have a remit to focus on the future technologies in which the UK could become self sufficient and resilient in the future, including emphasis on national security.
Pic: TFL (John Zammit)
