Survey Shows UK Manufacturing Confidence

03 Dec 2007

News posted by Shannon Dumper

 major survey of 600 companies conducted by the EEF has suggested that the UK will continue to be the primary location for high value manufacturing for the ensuing five years.

The results of the survey showed that, where production operations were concerned, seven out of 10 companies intended to remain in a UK primary location, despite undergoing some moves to low cost economies. Moreover, 90 per cent of companies said that their research and development operations would continue to be based in the UK.

This survey confounds the myth that manufacturing is on the fast boat to low cost economies with little physical production left in the UK, said EEF chief economist Steve Radley.

However, only half of foreign-owned companies viewed the UK as their main location for research, development, design or marketing. Radley explained that this illustrated the importance of maintaining an internationally competitive environment in the UK if it is to continue attracting these activities.

Where competitive advantage is concerned, production/assembly was voted highest-ranking source by 29 per cent of companies, followed by design and development (23 per cent) and service provision (18 per cent). Despite this, there was a pronounced shift in concentration from production to innovation-driven activity among manufacturers. Indeed, it is likely that research and development will take over as the central source during the next five years.

Also of interest was the increasing importance of R&D within export-focused businesses, with over 80 per cent of companies with a percentage of turnover from exports greater than three quarters identifying it as being one of their primary strengths in five years time.

EEF s survey showed that the chemicals, man-made fibres and electronics industries were currently the manufacturing top performers, but also noted a marked rise in success for traditional sectors such as machine tools, which is likely to have come as a result of strong branding and niche market strength.