25 Jun 2024

The need to be ahead of the curve

Energy

The latest UK Manufacturing PMI has shown that despite difficult conditions, UK manufacturers maintained a positive outlook in April. Optimism rose to a 14-month high, with over 61% of companies reporting that they expect output to rise during the coming year. Positive sentiment reflected investment spending, new product launches, forecasts of improved market conditions and organic growth plans. However, as Chris Barlow, partner at MHA, commented, the UK is in danger of languishing in an era of stagnation as international competitors pull ahead.

The problem which he highlights, and I agree with, is that as a country we still lack an industrial strategy to provide a long-term vision for UK manufacturing. The sector needs reassurance and support from the government to really thrive. Unfortunately, by and large it hasn’t been getting it. The potential move of investment by Unipart to the US or Europe due to the subsidies offered there is a worrying sign, which Barlow highlights, and illustrates missed opportunities.

The US is spending billions to help electric car firms and green energy and Europe is planning to relax state rules in green sectors but there has been no announcement from the UK. Although some incentives put in place at the Spring Budget were positive, there needs to be more help for those sectors that offer greater energy efficient potential and opportunities. For example, one of the major concerns within hydraulics is the increasing demand for energy-efficient hydraulic systems. With the rise in global energy prices and the need to reduce carbon emissions, there has been a push towards the development of more sustainable hydraulic systems. Although this has led to the development of new technologies such as hybrid hydraulic systems that combine electric and hydraulic power sources to achieve higher energy efficiency, these new developments need continued government support and encouragement for companies to continue developing and investing. For example, Barlow highlights how the UK has seen reductions in the vital R&D relief for SMEs, which means that these businesses will not be rewarded or encouraged to put their time into innovation – this needs to be reversed.

The push towards more sustainable and energy-efficient systems for our industry is a positive step and needs to be encouraged, and it is important to continue to prioritise these issues to improve the efficiency and safety of critical systems, but this can only be achieved if the UK Government is ahead of the curve and not just reactive.

Company info: Smart Futures