Britain's manufacturers are positive about the growth outlook for 2022 with almost three quarters of companies believing conditions for the sector will improve this year, according to a survey.
Rising inflation and access to labour are seen as the biggest risks to growth, the 2022 Make UK/PwC Senior Executive survey showed.
Two thirds of companies regard the UK as a competitive location for manufacturing, but the same number said leaving the EU had moderately or significantly hampered their business.
Over a half of companies fear a further impact from Brexit this year from customs delays due to import checks and changes in product labelling, the survey showed.
A third of companies are planning to counter supply chain issues by using British rather than international suppliers, with 31% saying they plan to re-locate some of their production back to the UK.
“It’s testament to the strength of manufacturers that they have emerged from the turbulence of the last couple of years in such a relatively strong position,” said Make UK chief executive Stephen Phipson.
“While clouds remain on the horizon in the form of rapidly escalating costs and access to key skills, the outlook is more positive for those that remain adaptable, agile and innovative."
He called on the government to set out a comprehensive industrial strategy.
“To build on this we now need to see a government fully committed to supporting the sector at home and overseas. This requires more than a Plan for Growth but a broader industrial strategy that sets out a long-term vision for the economy and how we are going to achieve consistent economic growth across the whole country,” Phipson said.
Cara Haffey, PwC’s UK industrial manufacturing and automotive leader, added: “Despite facing an unprecedented combination of continued COVID pressures, cost inflation and supply chain issues, our manufacturers are responding with an impressive amount of agility and resilience, which will stand them in good stead for the year ahead.”
She applauded the breadth of net zero ambitions reflected in the survey, with 49% of companies planning to invest in green technologies or energy efficiency measures in 2022.
“Across the UK we’re seeing an increasing number of businesses underpin their environmental, social and governance strategies with practical applications to decarbonise their operations and ambitions to build out their green skill base through the recruitment of 'green' jobs,” Haffey said.
The more positive outlook for growth was reflected across all major markets with 40% of companies forecasting growth in exports to the US, closely followed by the EU, while 26% are looking for growth in Asia and 21% in the Middle East.
Make UK has forecast that manufacturing grew by 6.9% in 2021 and predicted growth 3.3% for this year.