It’s fair to say the last couple of years have held a lot of uncertainty for manufacturers in the UK and across the world, and so we were really interested in the recent release of the Make UK and PWC Annual Executive Survey which surveyed over 228 companies to assess how they performed in 2021 and their predictions for the New Year.
The results paint a picture of manufacturing trends to expect in 2022 and we’ve pulled together the top ten for you here…
1. Feeling optimistic
73% of Make UK members surveyed are optimistic that conditions in their industry will improve in 2022. 25% of those expect significant improvements. This optimism is mirrored when it comes to financial conditions too. Over half (55%) expect improving economic conditions in 2022, both in the UK and globally.
In fact, 79% expect to increase their UK sales this year.
2. Increased productivity
It’s fantastic to note that manufacturing businesses aren’t just looking to survive but are looking to thrive in 2022. 60% of those surveyed are developing new products this year. Whilst another 11% are looking to have new products out in 2023.
Make UK itself forecasts that manufacturing grew 6.9% in 2021 and predicts growth of 3.3% for 2022.
3. Hampered by Brexit
It’s now 2 years since ‘Brexit Day’, The day that the UK formally left the European Union and it’s unsurprising to note that manufacturing is still very much feeling the effects of the changes. In fact, over half say that the need to change product labelling and changes at customs will have an impact on them this year.
37% believe delays at customs present the biggest risk due to the new trading rules for businesses in Great Britain importing and exporting to the EU, with 30% of businesses signalling they were already being effected by the pre-existing rules.
We’ve certainly experienced the impact of Brexit in our business with the number of applications from and placements of European nationals having fallen by almost 30% since 2019.
4. Need to retain
2021 was known by some economists as ‘The Great Resignation’ due to the number of people leaving their jobs. There was a tangible flip to a candidate-driven market, with skilled candidates having more opportunities available and therefore being able to pick and choose the right jobs and employers for them.
Manufacturing businesses are feeling this effect too. Many have listed the importance of retaining staff as key to their 2022 plans. In fact, half have stated they will invest in apprenticeships this year, whereas around two thirds of respondents said they will upskill or retrain existing staff throughout the year.
Within the Jonathan Lee Recruitment client base, we have already seen evidence of these changes, with clients offering increased workplace flexibility, training and enhanced benefits in order to retain valuable staff.
5. Need to recruit
As well as retaining staff, businesses also expect a huge drive to hire new people. 63% expect to increase their level of permanent staff this year, with only 6% expecting to recruit less staff than in 2021.
This is also reflected in plans to recruit contract and interim headcount. Over a third (37%) of businesses plan to increase the amount of contract staff they recruit compared with 2021.
We have seen an increase in demand across permanent, contract and interim recruitment services at Jonathan Lee Recruitment over the end of 2021 and that looks set to continue in 2022. We are also seeing an upturn in the need for executive and senior management appointments. Click here to find out more about our services.
6. It’s coming home…
The survey revealed that nearly two thirds (63%) of manufacturers feel the UK is a competitive location for manufacturing activities post Brexit. In fact, 73% agree that the opportunities here outweigh any risks.
COVID has also played its part in this, due to the shortage of many key assets and supply chain disruption. 31% of manufacturing businesses are actually looking to move their manufacturing operations back to the UK, whilst 44% have a ‘wait and see’ approach – indicating although this may be a government priority, the marketplace still needs to be convinced.
7. Move towards Net Zero
COP26 appears to have had a massive impact on manufacturing business planning for 2022 too. The event was held in Glasgow this year, putting the spotlight firmly on the UK and manufacturers across our nations have committed their focus to fully supporting initiatives and innovations to take us to a net-zero carbon economy.
Almost two-thirds agreed they will focus on going green this year, with almost half (49%) planning to invest in green technologies.
8. Rising input costs
Costs are on the rise once more, in fact MAKE UK research suggests they are increasing at their fastest rate ever.
The increase in energy and shipping costs, and, NI & Corporation tax rises has left businesses feeling the heat, and therefore it’s no surprise to hear that over half (52%) of businesses stated that their highest priority risk mitigation strategy is to put greater focus on controlling costs.
9. COVID
It’s now over two years since we first heard of COVID-19, and, since then lockdowns, quarantine, R-rates and ‘next slide please’ have become part of our everyday vocabulary.
Sadly, this doesn’t seem to be abating any time soon.
This is reflected in the survey responses, 54% surveyed expected the effects of COVID to be felt just as much this year by their businesses, whereas 34% see the biggest risk to them this year as being the threat of further lockdowns.
10. Digital technologies
The Fourth Industrial Revolution, 4IR, Industry 4.0, the smart factory, smart manufacturing, whatever you prefer to call the current rise in digital technologies, shows no sign of slowing down.
Nearly half (45%) of companies intend to invest in automation, artificial intelligence (AI), additive manufacturing or other forms of digital technologies this year, whilst another 20% have plans to invest in 2023.
In fact, even those that aren’t actively making changes are currently considering doing so (20%) – There is no doubt businesses that were already set up with smart technologies were better set to cope with the changes and challenges brought forward by COVID.
If the last two years have taught us anything, the ability to adapt and be flexible will be key during the next year. Jonathan Lee Recruitment is here to help you with any resourcing challenge you may be facing in 2022.
For over 43 years, we have been supplying the engineering, manufacturing and technical sectors with the best permanent, contract, interim and executive candidates both in the UK and overseas.
Visit https://www.jonlee.co.uk/ for more information or follow us on social to keep up with the conversation.
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