JAMES SELKA Chief Executive Officer, MTA
Most manufacturers are unlikely to look back on 2019 with any great fondness, due to uncertainties created by the UK’s protracted exit from the EU and tensions in global trade.
Businesses have been delaying non-essential investment decisions and building cash reserves. At the same time, it is noticeable that manufacturers are paying increasing attention to ensuring they have the skills they need to prosper in future.
So, there is a chequered picture; The market in the UK has held up better than in other parts of Europe. The financial prudence of companies hardly drives their development or the sector’s but they may be better prepared for any sharp downturn in business than 12 years ago.
I was struck by the report in June from the Institute for Manufacturing, Inside the Black Box of Manufacturing, commissioned by the Business Department (BEIS). It took forward The True Impact of UK Manufacturing, the landmark report from Oxford Economics, commissioned by the Manufacturing Technologies Association and published 15 months before.
Taken together, these reports make clear the persuasive case for the central role of manufacturing in our economy. This is a key message for the new government and Parliament, especially in an era of technological change, as we seek to ensure that we have the educational system and investment support that will enable industry, and the economy, to thrive.
Also in 2019, the government saw more evidence of the UK’s productivity problem. Manufacturing is a paradox. It’s the most innovative sector in both products and processes but the UK lags world leaders in adopting new technology. The Made Smarter North West Pilot this year found that firms themselves want help to improve leadership and management skills.
The pace of innovation is increasing, bringing both challenges and huge opportunities.
2020 sees the return of MACH, the longest-running manufacturing and engineering exhibition in the UK. Despite the current climate, manufacturers have shown unwavering support for the event; nearly all exhibition space has already been taken.
MACH 2020 will have an unprecedented amount of working machinery on display. Having the latest manufacturing technology solutions available under one roof gives visitors an unrivalled overview of the sector. Manufacturers of whatever size will be able to see how the latest technologies will help improve their productivity and enhance the quality of their products.
Many firms will be looking to invest in themselves, in new machinery, re-tooling, and improving skills levels with new training programmes. As MACH will demonstrate, there is no shortage of options – or sources of finance.
MACH 2020 sponsor Lloyds Bank has pledged additional, fresh funds for the sector. It loaned in excess of £6 billion to manufacturers between 2013 and 2018 and has now committed a further £1 billion per year through to the end of 2020.
The two-year increase in the Annual Investment Allowance from £200,000 to £1 million should also help.
I hope everyone with a stake in the future of the manufacturing industry will take the opportunity to visit MACH 2020 in April and see for themselves what is possible.