ANNUAL MANUFACTURING REPORT 2016

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ECONOMY, POLICY & GROWTH ANNUAL MANUFACTURING REPORT2016 1 How confident are you about the UK economy over the next 12-36 months? 2015 71% Very optimistic 14% Quite pessimistic 15% Quite optimistic Very pessimistic 0% 100% 75% 50% 25% 3 How well do you think the government is managing the manufacturing sector of the UK economy? 2015 2009 2010 2011 2012 2013 2014 2015 0% 2008 2009 2010 2011 2012 2013 2014 0% 20% 40% 60% 80% 100% 2 The UK’s manufacturers continue to look to the future with confidence. Despite negative reports, a slowdown in manufacturing output over the summer of 2015 and uncertainty in overseas markets – especially China – the mood remains positive. More than 84% of respondents said they were ‘very’ or ‘quite’ optimistic, which is the secondhighest figure we have ever recorded. No-one says they are ‘very pessimistic’; a total of just over 15% said they were ‘quite’, which is less than last year’s one in five. The UK’s economy continues to be among the strongest in the G7 nations and the good news for exporters is that some struggling Eurozone economies, such as Spain, seem to be recovering as well. How well do you think the government has been managing the economy as a whole, across the country and all business sectors? 2015 100% 80% 2015 Exceptionally well Moderately well Very poorly 70% believe Very well Moderately poorly Exceptionally poorly that the economy has been managed reasonably well In general, manufacturers believe that the government has been managing the economy reasonably well – less than 12% expressed negative views. 60% 40% 20% 0% 2009 2010 2011 2012 2013 2014 2015 When it comes to manufacturing in particular respondents were less enthusiastic; nearly one-third suggested that there is room for improvement. However, that still leaves a big majority in favour, with nearly 70% giving the thumbs-up (54% moderately well, 12% very well and 4% exceptionally well). That is noticeably up on last year’s vote, when the total of positive votes was 58%. Exceptionally well Moderately well Moderately poorly Very well Exceptionally poorly Neither well nor poorly Very poorly
ECONOMY, POLICY & GROWTH ANNUAL MANUFACTURING REPORT2016 4 5 To what extent do you expect the government’s declared policies, such as the Northern Powerhouse, and its broader industrial strategy including Local Enterprise Partnerships, for example, will help your business to grow over the next five years? 2015 They will help a lot They will help a little They will probably make no difference 50% They will help a little This is the first year that we have asked this question in this form. The overall response to specific aspects of the government’s economic policy can be summarised as cautious approval. Exactly half of the sample expect that policies such as the Northern Powerhouse will make some difference but fewer than one in 10 (8%) believe that they will help a lot. Less than four per cent expect the effects to be negative and no-one expects them to be harmful – exactly the same number as believe that they are nowhere near enough. That last result is a little strange; whenever manufacturers voice an opinion about government policy it tends to be to ask it to do a great deal more or to get out completely. In your experience do manufacturers in the following countries receive more or less government support than manufacturers in the UK? 100% 80% 60% 40% 20% 8% 39% 4% 0% 0% They will hinder business prospects They will be positively harmful to our business They do not go anywhere near far enough 6 What effect do you expect that global influences will have on the UK economy? 2015 Very positive Quite negative Very negative 52% Quite positive 6% 42% 0% Manufacturers continue to maintain that competitors in other countries receive more government help than we in the UK do, and the list continues to be led by Germany (76%) and France (70%). The one that seems to have slipped back a lot is China; 57% of respondents to our survey last year reckoned that Chinese companies got a lot more government help than manufacturers in the UK but that proportion this year is 46%. Italy and India (34%) have overtaken the USA to move into fourth position in the perceived league of recipients of government largesse but only just: 32% of respondents still believe that, for all the talk of free markets and opposition to government interference, American companies get more public support than the British (down from 40%). Estimates of Russian government support for their companies has fallen significantly, from 30% in 2015 to just 14% a year later. This could be because fewer companies are directly engaged with Russian businesses as a result of the ongoing EU economic boycott. South Africa and Australia are in the same teen-percentage bracket; the proportion of responders identifying the Netherlands, Switzerland, Canada and Spain as particularly advantaged ranged across the 20s – but the country with the highest percentage reckoning that its support wasn’t as good as the UK’s was also Spain, with 24% mentioning it. 0% Germany France More The Netherlands Italy Less Spain Switzerland Canada USA Australia Don’t know Brazil Russia India China South Africa About the same The view of the global economic situation has improved since last year, despite the downturn in China’s fortunes: nearly 58% of respondents have either a “quite positive” or “very positive” position. This is a reversal from 2015, when 56% responded that they were “quite negative”.
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