Manufacturing Outlook 2024 Q3
16.09.2024
Britain’s manufacturers have yet to see an immediate boost from a change of Government, according to the findings of Make UK and BDO’s latest Manufacturing Outlook report for Q3 2024.
Despite this, firms are forecasting a boost to overall economic prospects from a period of greater political stability, with almost 6 in 10 expecting better growth over the next 12 months as a result. In contrast, just 6% of companies expect GDP to decline this year as a result of the new Government.
The report also finds that output figures have turned negative for the first time in four years, but are expected to jump by a third next quarter, with the recruitment picture looking similar. Export orders are also currently exceeding the domestic market, though this is forecast to change in Q4.
Even with this mixed picture, business confidence has continued to climb, equalling the highest levels recorded by this survey since it began back in 2014.
Ahead of the upcoming Autumn Statement and Spending Review at the end of October, Make UK is calling on Government to maintain momentum by publishing further details on the long-awaited industrial strategy, including the composition and governance of the Industrial Strategy Council, and to also commit to removing unnecessary barriers to growth, including:
- Bringing forward the UK CBAM (Carbon Border Adjustment Mechanism) to 2026.
- Reviewing and uplifting apprenticeship funding bands.
- Making a greater commitment to more long-term, large scale infrastructure projects that will make the UK a more attractive place to invest.
This quarter presents a tale of two halves with output turning negative and recruitment taking a dip, yet investment remains positive and business confidence continues to climb. With an Autumn Budget and Spending Review fast approaching, now is the time for Government to pick up the pace and deliver on pre-election promises, most notably the publication of a long-term robust Industrial Strategy.
This must be combined with policy levers that help not hinder growth and international competitiveness. In particular, this means bringing forward immediately the UK CBAM and taking measures to tackle the disastrous apprenticeship numbers.
Manufacturers are hopeful that a period of greater political stability will provide a better economic outlook ahead, and that in turn is boosting business confidence. Time will tell if that confidence can translate to improved output and orders next quarter, but there’s a growing sense of hope that a rising tide can lift all boats.
All eyes are on the Government’s next steps. We need an industrial strategy that is fit for purpose to ensure that the confidence firms currently have in future economic prospects is not misplaced.
