Forget the traditional image of a struggling manufacturing sector, says a new report. UK manufacturers today are upbeat about their sector, which has become increasingly innovative and diverse, despite the economic slump in recent years. Manufacturers are positive about their businesses now, but they do have concerns about the skills shortages and are calling for increased dialogue with government to ensure the sector can fulfil its great potential for growth in the future.
An insight into modern manufacturing, a report published today by Engineering the Future, an alliance of professional institutions including the Royal Academy of Engineering, the Institution of Engineering and Technology (IET) and the Institution of Mechanical Engineers (IMechE), paints a positive picture of the state of today's manufacturing industry, while revealing some challenges and constraints ahead.
The report tells the story through the words of manufacturers themselves. Through a series of interviews, the report finds that UK manufacturing is a vibrant part of the economy that is well-placed to deliver growth in globalised markets, to the benefit of the UK economy as a whole.
However, the report highlights that manufacturers are very concerned that, as their workforce retires, they will not be able to get the engineers they need - the shortage of skilled workers was an issue that most of the interviewed companies highlight as the main area of concern.
Since the recession, most manufacturers have learnt to redesign their business strategies to account for similar events in the future. Most manufacturers now keep their edge by focusing on slimming down their procedures, cutting down waste and increasing production efficiency.
Manufacturers believe that government support for their sector is effective, but could be improved. For example, an increased and more consistent dialogue between government and manufacturers would be beneficial to ensure that the UK is creating the right environment for the sector to flourish and that all the support schemes available have the appropriate processes in place. For example, smaller companies say that many of the schemes available are just too complex and time-consuming in terms of the amount of paperwork required.
Andrew Churchill, Managing Director of JJ Churchill, one of the companies interviewed in the report, said: "This report specifically recognises the enormous diversity of our sector, but from that variety has drawn some common themes. From my perspective, I'm not looking for the government to either plan for me or run my business, but there remain some key areas where their engagement is essential. These include the ongoing need for a clear, top-level vision from government together with consistency and predictability of any intervention; the vexed skills issue and global competitiveness of the UK as a manufacturing base as described by fiscal attractiveness."
Nigel Fine, Chair of the Engineering the Future Plenary which produced the report said: "It's great news to see that the UK's manufacturing industry, which is often perceived as struggling, is in such fine form. The priority now must be to make sure it stays that way. A two-way dialogue between government and manufacturers will ensure that support can be consistently delivered to improve this valuable part of the economy. We should celebrate the diversity and success of our manufacturers in spite of such a challenging economic situation over the last few years."
An insight into modern manufacturing (2.92 MB)
Notes for editors
Engineering the Future (EtF) is a broad alliance of the engineering institutions and bodies which represent the UK's 450,000 professional engineers. We provide independent expert advice and promote understanding of the contribution that engineering makes to the economy, society and to the development and delivery of national policy. The leadership of Engineering the Future is drawn from the following institutions: The Engineering Council; Engineering UK; The Institution of Chemical Engineers; The Institution of Civil Engineers; The Institution of Engineering and Technology; Institution of Structural Engineers, The Institution of Mechanical Engineers; The Institute of Physics; The Royal Academy of Engineering.
The IET is one of the world's largest organisations for engineers and technicians. We have nearly 160,000 members in 127 countries around the world. The IET is working to engineer a better world. We inspire, inform and influence the global engineering community, supporting technology innovation to meet the needs of society. The IET is the Professional Home for Life for engineers and technicians, and a trusted source of Essential Engineering Intelligence and thought leadership.
Royal Academy of Engineering. As the UK's national academy for engineering, we bring together the most successful and talented engineers for a shared purpose: to advance and promote excellence in engineering. We provide analysis and policy support to promote the UK's role as a great place to do business. We take a lead on engineering education and we invest in the UK's world-class research base to underpin innovation. We work to improve public awareness and understanding of engineering. We are a national academy with a global outlook. We have four strategic challenges: Drive faster and more balanced economic growth; foster better education and skills; lead the profession; promote engineering at the heart of society.
The IMechE. The Institution of Mechanical Engineers was established in 1847 and has some of the world's greatest engineers in its history books. It is one of the fastest growing professional engineering institutions. Headquartered in London, we have operations around the world and over 105,000 members in more than 140 countries working at the heart of the most important and dynamic industries such as the automotive, rail, aerospace, medical, power and construction industries.
Case studies featured in the report include:
Vitsoe, a German producer of high-end furniture, which, having gone into receivership, left its UK importer with a choice to make: follow the German firm into closure or take on the manufacturing itself. Choosing the latter, through the courage of their convictions Vitsoe negotiated design rights and moved production of their contemporary furniture to London.
Meanwhile, Autoflame Engineering Ltd, manufacturer of industrial and commercial boiler control systems that reduce fuel usage and cut emissions, achieved steady growth during the recession and even took on more staff. They credited their success to their efforts in maximising internal efficiency, driving down waste and improving cost control. The company maintained its forward drive by patenting their products and using the patenting process to drive further innovation.
Moving to more favourable markets helped the survival and growth of Logicor, a company providing environmentally-friendly research and development support to industry, especially creating and supplying 'green' patents. Throughout the years, Logicor monitored government programmes in energy conservation worldwide, moving into a new market with their products after new initiatives were launched, sure that there was a need for their services.
For others the secret has been to respond creatively to the crisis, reinventing their sale pitch. British icon Brompton Bicycles, for example, increased its spend in developing new markets during the crisis. Marketing its products as a way for new customers to save on commuting costs, Brompton successfully managed to increase its Spanish distribution network ten folds while the Spanish economy shrank.
Others relied on investment to keep ahead of competitors, like JJ Churchill. The family-owned precision engineering business found that spending on long lead-time equipment when prices were lower allowed them to overtake their competitors thanks to increased capacity and capabilities, especially once the recovery started to be felt. They also found that the investments had a positive impact on the staff's morale.
For more information contact:
Giorgio De Faveri at the Royal Academy of Engineering
Tel: 020 7766 0655
Email: Giorgio De Faveri
Robert Beahan, The Institution of Engineering and Technology
Tel: 014 3876 7336
Email: Robert Beahan
Daniel Hearn, The Institution of Mechanical Engineers
Tel: 020 7973 1261
Email: Daniel Hearn