ENGINEERED IN BRITAIN MANUFACTURING A SUCCESSFUL ECONOMY?

ENGINEERED
IN BRITAIN
MANUFACTURING
A SUCCESSFUL
ECONOMY?
Improving the world through engineering

It is worrying that the long-predicted
skills shortage is starting to be felt
within our manufacturing sector.
Philippa Oldham CEng MIMechE
Head of Manufacturing and Transport
Institution of Mechanical Engineers
This is the fifth year of the Institution’s
Engineered in Britain campaign, which aims
to promote the value of engineering and
manufacturing to the health and wealth of the
UK’s economy.
This report builds on the results of previous
surveys, and aims to ascertain the perceptions of
Manufacturers and the Public towards the value,
role and input of Government in the growth of this
valuable economic sector.
This report has been produced in the context
of the Institution’s strategic themes of
energy, environment, education, healthcare,
manufacturing, transport and its vision of
‘Improving the world through engineering’.
Image credits: Cover: © Jason Alden/Bloomberg via
Getty Images; page 4: © Jaguar Land Rover Limited;
page 14: © Chas A Blatchford & Sons Ltd; page 26:
© Mike Wilkinson/Bloomberg via Getty Images.
Published December 2015.
Design: teamkaroshi.com

CONTENTS
02 FOREWORD
04 GOVERNMENT
SUPPORT FOR
MANUFACTURING
14 EDUCATION
AND SKILLS
26 UK MANUFACTURING

FOREWORD
Philippa Oldham CEng MIMechE
Head of Manufacturing and Transport
Institution of Mechanical Engineers
2015 has been a year of political surprises.
Few had predicted a Conservative majority
Government, and even fewer that a relatively
unknown backbencher would become the new
Labour leader after the party’s poor General
Election performance. Similarly, the SNP’s
overwhelming success in Scotland stunned the
media and commentators, making it the third
biggest party in Westminster, and replacing
the Liberal Democrats whose vote almost
entirely disappeared.
However, it was not unexpected that a
Conservative administration would continue
its drive towards making the country live
within its means, and therefore begin the slow
process of eliminating our sizable national debt.
The second Comprehensive Spending Review
presented by the Chancellor, Rt Hon George
Osborne MP, in November turned out to be
less severe than many had expected, although
over the 2010–2020 period many unprotected
Government departments will have had at least
a 40% reduction in their overall funding, leading
to inevitable cuts in services and projects.
Throughout 2015, the UK has seen the
Purchasing Manufacturing Index figure remain
above 50, indicating constant expansion
within the sector. The figure is derived from
data on production levels, new orders, supplier
deliveries, inventories and levels of employment.
However, the latest Office of National Statistics
manufacturing figures suggest that the sector’s
output is down on last year. The reason for
these contradictory figures can be explained
by individual elements of the sector, such as
the automotive and food & drink, experiencing
strong growth over the last 18 months, whereas
aerospace has felt the effects of the global
economic slowdown.
These concerns may be a leading factor in the
results of our fifth Engineered in Britain survey.
The report consists of two surveys, the first
conducted by MSS Research, which gathered
the views of 1,000 senior professional engineers
working in the UK’s manufacturing sector. The
second was conducted by ICM Unlimited, which
put a majority of the same questions to 1,000
members of the general population.
Looking through the results, I have been struck
by the level of concern regarding the engineering
skills shortage that companies are experiencing.
While this has not come as a surprise to me or
the Institution, it is worrying to see evidence
that the skills shortage is starting to bite. We
know the issue exists, but there remains a lack
of clear, joined-up action to address the problem.
The solution is not for Government to resolve
on its own, having neither sufficient knowledge
nor the resource to do it alone. What is required
is an agreed approach from all involved parties,
in Government (primarily the Departments for
Education and for Business, Innovation & Skills),
industry, teachers and academia. This is a longterm
problem which needs a long-term solution,
if we are to remain a major player in the global
economic marketplace.
Following the publication of our Five Tribes:
Personalising Engineering Education report in
late 2014, which highlighted the fact that 71%
of all students feel disengaged from science and
engineering, we will be following this up with
our Big Ideas report in 2016, which will provide a
range of innovative solutions to encourage more
people to pursue engineering careers. It is my
hope that our Institution can play a significant role
in helping the UK change the way we teach and
promote science and engineering, and maintain
our position as a leading economic power.
Finally, I would like to thank BDO LLP for
partnering with us on this report. This
partnership allows us to report the results with
a broader perspective, allowing some economic
analysis and insight from one of the country’s
leading accounting firms.
02 Engineered in Britain: Manufacturing a Successful Economy?

Tom Lawton
Head of Manufacturing
BDO LLP
As always, the Engineered in Britain research
provides a rich source of information on the
views of manufacturers and the public on the
state of UK manufa cturing. I hope you enjoy
the report and that it provides either support
or challenge to your views on key issues in
the sector.
I have not attempted a comprehensive critique of
the results in this overview but focus on findings
that I thought were particularly interesting.
One big challenge facing us at the moment is the
need for European reform. The findings show
that 62% of manufacturers and 58% of the public
believe that uncertainty about the UK’s position
in the EU is having a negative effect on UK
manufacturing. The survey also shows that 58%
of manufacturers and 47% of the public feel that
the UK remaining in the EU with renegotiated
terms is the best option for UK manufacturing,
with 32% of manufacturers and 26% of the
public feeling that staying in the EU with no
change is the best option.
What is not clear, however, is what happens
if the terms of membership are not able to be
renegotiated – would manufacturers move to the
‘stay in’ or ‘leave’ camp?
I remain of the view that continued uncertainty
is not helpful to UK manufacturing and an
early vote would be useful. I also believe that,
in world of increasingly large economic power
blocks and alliances, leaving our largest trading
markets – and what is still our largest export
zone – would seem a risky step to take.
Despite this, a third of manufacturers believe
the government is performing well in terms of
its education and skills policy. Unfortunately, we
believe that the skills crisis is likely to worsen
as more automation and digitisation is required
for UK manufacturing to remain competitive.
It is far from clear that the ‘strategic approach’
to education and skills in this country is being
changed or responding fast enough to provide
the skills necessary in the next five, ten and
15 years.
Finally, question 20 delivers some very
interesting results about the UK’s infrastructure,
with electricity generation, rail network,
and road infrastructure being identified as
key weaknesses for more than half of all
manufacturers. All I would say is that it is
difficult to address such fundamental and
long-term challenges without a long-term
industrial policy that avoids the disruptions of
political cycles. The government should match
manufacturers’ long-term outlook by looking
15–20 years ahead to plan an industrial policy,
avoiding the disruptions of the political cycle.
The programme must be steered by a dedicated
manufacturing minister, able to focus on firms’
needs in a way that will benefit us all.
BDO is again delighted to partner with the
Institution of Mechanical Engineers in producing
this research, which we hope will be a valuable
addition to the UK manufacturing debate.
Fears of the impact of the skills crisis remain
high. More than half of manufacturers think
that the lack of skilled people is the biggest
danger to UK manufacturing, far ahead of global
competition at only 25%. Our findings also show
that three quarters (77%) of manufacturers
feel that the skills gap has a negative effect on
investment in UK manufacturing.
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03

75% of the public and 80% of
the manufacturers believe the
Government should award
manufacturing contracts to
British-based companies, even if
this was a more expensive option.
04 Engineered in Britain: Manufacturing a Successful Economy?

GOVERNMENT SUPPORT
FOR MANUFACTURING
From a political perspective, the UK’s
manufacturing sector is experiencing a
renaissance. Today, Ministers and MPs from
across the political spectrum are more eager
than ever to visit our factories and innovation
centres, and promote the advanced technologies
being developed or manufactured by our
engineers and scientists.
Influential political heavyweights, such as the
Rt Hon George Osborne MP, have also been
strong vocal advocates for British science
and engineering, helping to promote to the
media, and therefore the public, its value and
contribution to the economy. It is undeniable
that this increased political focus on science,
engineering and manufacturing stems from
the 2008 financial meltdown, and the public’s
wariness of the banking and financial industries.
Having said that, the results of the 2015
Engineered in Britain survey show a divergence
between the perceptions of manufacturers and
the public on political support for the sector – a
first in the five years of this survey. Although
political exposure has helped the sector to
achieve a wider positive profile (and this is
reflected in this year’s public survey results),
the manufacturers’ survey indicates a near
cross-the-board decline in their perceptions of
Government’s support of the sector. This may
be a reflection of sectors’ continuing concerns
of a global economic slowdown, especially in
China and the EU, which has a direct impact
on exports.
In the 2014 EIB survey, both the public and
manufacturers seemed more confident than
in 2013 that Government was committed
to creating a more balanced economy
(manufacturers: 37%–48%; public: 24%–33%).
This reflected the optimism in our economy,
which was growing faster than almost any other
developed nation. However, by 2015 the view
from both survey groups had noticeably gone in
different directions.
Question three provoked a strong majority vote,
where both the public (56%) and manufacturers
(84%) groups continue to believe that
Government (overall) remains more committed
to supporting the financial sector than
to manufacturing.
On policy performance (Q6), most polled results
seem to record a positive increase from the 2014
survey, although again a majority of areas still
recorded below 50% approval ratings. Notable
changes with the public survey approval ratings
were Government policy on education and
skills (2014 21%–46% 2015), environment (2014
18%–41% 2015), energy (2014 15%–36% 2015) and
transport (2014 17%–31% 2015). These results
show sizable improvements in perceptions
compared to the 2014 survey, and do not reflect
some well-profiled difficulties experienced in
these areas over the last 12 months, such as
the reduction in renewable energy subsidies,
continuing concerns about new nuclear
build, uncertainty over the UK’s transport
infrastructure to meet future demands (although
the Institution welcomes the formulation of the
National Infrastructure Commission), and the
provision of a new airport runway in the South
East of England.
Finally, question five gained the strongest
support from both groups, asking if Government
should award manufacturing contracts to
British-based companies, even if this were a
more expensive option. Overwhelmingly the
public (75%) and manufacturers (80%) supported
this view.
The Institution first asked this question back
in 2011, after Siemens was awarded the
Thameslink contract over Bombardier, resulting
in the loss of 1,400 UK jobs. Even after nearly five
years, and changes to Government procurement
procedure to try to avoid a similar outcome, there
still remains a strong view that Government
should do more to back its own manufacturing
base in a similar way to Germany and France.
In 2015, public optimism and belief in
Government’s commitment to a more balanced
economy (Q1) continue to grow (2014 33%–40%
2015), whereas manufacturers have become less
convinced (2014 48%–45% 2015). Furthermore,
when asked about future confidence in our
manufacturing sector (Q4), the public vote nearly
doubled (2014 15%–29% 2015) contradicting the
manufacturers’ vote which again declined (2014
61%–51% 2015). When asked if Government
policy was helping manufacturers (Q2), again
the public had a more positive perception (2014
34%–38% 2015) whereas manufacturers saw a
decline in confidence (2014 41%–39%).
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05

GOVERNMENT SUPPORT
FOR MANUFACTURING
Q1–Q6
RESULTS
GOVERNMENT SUPPORT
FOR MANUFACTURING
06 Engineered in Britain: Manufacturing a Successful Economy?

Q1
The Government is committed to creating a more
balanced economy by growing UK manufacturing?
■
■
Manufacturers
Public
2011 2012 2013 2014 2015
49
48
45
40
37
35
33
31
26
24
imeche.org/engineeredinbritain
07

Q2
The Government’s policies are
helping UK manufacturers?
■
■
Manufacturers
Public
2011
2012
2013
2014
2015
41
39
38
34
26
24
23
20
19
19
08 Engineered in Britain: Manufacturing a Successful Economy?

Q3
The Government is more committed to the
financial sector than to the manufacturing sector?
■
■
Manufacturers
Public
2012 2013 2014 2015
86
84
80
76
56
56
51
50
imeche.org/engineeredinbritain
09

Q4
Have you become more or less confident about the future
of manufacturing since the Conservatives came to power
in 2010 (coalition) and their election victory in May 2015?
■
■
Manufacturers
Public
More
29
51
2015
15
61
2014
11
28
2013
10
37
38
2012
2011
Same
29
36
2015
25
50
2014
34
36
2013
38
41
2012
42
2011
Less
13
18
20
22
23
34
35
43
45
2015
2014
2013
2012
2011
Don’t know
0
1
2015
1
13
2014
1
11
2013
2
2
6
2012
2011
10 Engineered in Britain: Manufacturing a Successful Economy?

Q5
Would you rather the Government favoured British-based
companies when awarding manufacturing contracts,
even if this was a more expensive option?
■
■
Manufacturers
Public
Don’t know
5
No
20
2
18
80
75
Yes
imeche.org/engineeredinbritain
11

Q6
How well is the Government performing
in each of the following policy areas?
■
■
Manufacturers
Public
Education and Skills
Growing the Economy
2011 2012 2013 2014 2015
2011 2012 2013 2014 2015
58
57
46
50
39
25
34
25
31
34
32 34
31
27
31
34
20
21
19
13
Manufacturing Policy
Environmental Policy
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
40
41
21
12
19
14
17
16
26
25
35
24
35
19
32
30
21
23
18
28
12 Engineered in Britain: Manufacturing a Successful Economy?

Energy Policy
Transport Policy
2011 2012 2013 2014 2015
2011 2012 2013 2014 2015
36
24 26
23
18
18
15
21
22
19
29
19
21
17
31
19
Taxation
Regulation
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
39
34
35
32
27
29
26
28
18
21
14
18
21
18
21
17 18
21
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13

UK science and engineering
is the envy of many nations
around the world.
14 Engineered in Britain: Manufacturing a Successful Economy?

EDUCATION
AND SKILLS
UK science and engineering is the envy of
many nations around the world. We produce,
proportionally, more patents than any other
country, with the exception of the United States.
Political, public and media support for UK
science and engineering is generally positive.
However, regardless of all this, predictions
are that by 2022 the UK will experience a
shortage of nearly 500,000 qualified engineers
and technicians. This shortage is due mainly
(but not exclusively) to the ‘baby-boomer’
generation retiring from work at the same time
as manufacturing sectors, such as energy,
automotive, aerospace and food & drink, are
growing in size. This predicted shortage is not a
recent discovery, but one that was noted as far
back as 1980.
The attempts by successive Governments
and the engineering profession to address the
looming skills shortage have had little impact
at best. The ‘reintroduction’ of apprenticeships
has certainly helped, by providing people with
an alternative way to enter the profession rather
than going to university. However, despite all
these efforts, there seems to have been little
change in the numbers of school leavers who
are being inspired to consider science and
engineering as a possible career option – a
point examined in detail in the Institution’s
2014 report Five Tribes: Personalising
Engineering Education.
Careers Advice and the Next Generation
Careers advice in schools has a reputation for
offering students inaccurate and poor-quality
guidance, especially when it comes to science
and engineering. The downgrading of the
careers advice provision during the Coalition
years has exacerbated the issue, and is reflected
in both public (57%) and manufacturers (72%)
groups believing that Government is not doing
enough to promote science, engineering and
manufacturing to future generations (Q7).
The Institution, through its Teacher Industrial
Partners’ Scheme, is attempting to address
this ongoing concern by providing teachers
(a primary source of careers advice to many
students) with two-week industrial placements,
allowing them a better understanding of the
application of science and engineering in the
real world.
Given the well-known science and engineering
shortages, both the public (81%) and
manufacturer (83%) groups showed strong
support for STEM-based courses to be
subsidised by Government over other subjects
(Q8), thereby making them more financially
attractive to students. However, after the
November 2015 Comprehensive Spending
Review, it is unlikely that this will be a future
or viable option for Government, with many
of the available grants being converted to
student loans, and substantial cuts to the
Further Education budget. The only noticeable
opportunity to increase engineering numbers
is by the recent removal of university caps on
student numbers, allowing possible expansion of
campuses. Although a positive sign, it has to be
noted that science and engineering faculties are
expensive to build and operate. Therefore, while
many universities may take this opportunity to
expand, some may find the costs too expensive
and limit, or close, their engineering faculties,
unable to be competitive with their rivals.
Company Recruitment
The second part of this section was exclusively
focused on gauging views from the manufacturer
survey group. Of the 1,000 engineers polled,
over two thirds indicated that their company
was currently recruiting engineers (Q9), with
the type of engineer being recruited (Q10) fairly
evenly spread (Chartered 51%, Incorporated 46%,
Engineering Technician 43% and Engineering
Apprentice 48%). However, the results looking
at finding engineers with the right skills and
abilities (Q11) were of concern, as they found
that only 47% of respondents felt that applicants
met their needs. When asked specifically
about skill deficiencies in the recruitment of
engineering apprentices and graduates (Q13),
it was found that management skills (75%), and
leadership (64%) ranked poorly. However, the
lack of practical skills was identified by 68% of
respondents, which is of particular concern as
engineering is about taking theory and applying
it in a practical way. This is not unique to the
Engineered in Britain survey, however, it is a
result that is appearing to get worse over the
last few years, potentially due to the imminent
retirement of the baby boomers.
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15

GOVERNMENT SUPPORT
FOR MANUFACTURING
Q7–Q13
RESULTS
EDUCATION AND SKILLS
16 Engineered in Britain: Manufacturing a Successful Economy?

Q7
Do you think the Government is doing enough with
careers advice to promote science, engineering and
manufacturing in schools?
■
■
Manufacturers
Public
2015
No
Yes
2014
21
2013
13
73
65 72
13
2015
No
2014
Yes
2013
31
55
34
57
13
19
imeche.org/engineeredinbritain
17

Q8
Do you believe that courses in science and engineering
where the UK is experiencing shortages of qualified
people should be subsidised by government?
■
■
Manufacturers
Public
Don’t know
No
1
16
3
16
81
83
Yes
18 Engineered in Britain: Manufacturing a Successful Economy?

Q9
Is your company currently
recruiting engineers?
Manufacturers only
Don’t know
2
No
28
70
Yes
imeche.org/engineeredinbritain
19

Q10
If yes to Q9, what level of engineer
is your company recruiting?
Manufacturers only
Chartered
51
Incorporated
45
Technician
43
Apprentice
48
Other
17
Don’t know
1
20 Engineered in Britain: Manufacturing a Successful Economy?

Q11
If yes to Q9, are you finding engineers
with the right skills and abilities?
Manufacturers only
Don’t know
4
47
Yes
49
No
imeche.org/engineeredinbritain
21

Q12
Which of the following incentives from Government
do you think would encourage your company to take
on more apprentices or engineers?
Manufacturers only
Training levy fund
Reducation in the minimum wage
2011 2012 2013
2014
2015
2011 2012 2013
2014
2015
63
50
55
53
51
14
12
9
5 6
National Insurance breaks
£3,000 for any person who
completes their apprenticeship
2011 2012 2013
2014
2015
2011 2012 2013
2014
2015
64
63
58
56
50
56
58 58
53
58
22 Engineered in Britain: Manufacturing a Successful Economy?

Reduction in corporation tax
2011 2012 2013
2014
2015
53
61 60
54
58
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23

Q13
In your experience, do you find that
apprentices, graduates and new recruits
lack any of the following skills?
Manufacturers only
Management skills
Communication skills
2013 2014 2015
2013 2014 2015
71
75
65
42 43
46
Good maths and science
Work ethic
2013 2014 2015
2013 2014 2015
36 35 34
38
32 32
24 Engineered in Britain: Manufacturing a Successful Economy?

Practical skills
Leadership
2013 2014 2015
2013 2014 2015
68
64
57
53
53
44
Design skills
2013 2014 2015
45
38
44
imeche.org/engineeredinbritain
25

Manufacturers’ primary concern
for the sector’s future growth
was the lack of skilled engineers
and technicians.
26 Engineered in Britain: Manufacturing a Successful Economy?

UK MANUFACTURING
Although the UK economy has outpaced
many of our economic rivals in recent years,
the manufacturing sector’s road to recovery
has been patchy. With exports being a major
component in the success of the sector, slowing
economic growth in regions such as China and
the Eurozone is less-than-welcome news.
However, although the state of the global
economy is of concern, when surveyed,
manufacturers’ primary concern for the sector’s
future growth (Q18) and investment potential
(Q19), was the lack of skilled engineers and
technicians. Indeed, 77% of the manufacturers
thought it was the biggest barrier to future
investment in the sector, well outstripping the
UK tax regime (34%), infrastructure deficiencies
(44%) and increasing labour costs (43%).
The Government has introduced a number
of proposals to address the nation’s skills
gap, including the provision of three million
apprenticeships, the proposed apprenticeship
levy and Trailblazers. However, it remains to
be seen if these will help to reduce the skills
gap in science and engineering. Indeed, many
believe that this issue cannot be addressed by
Government alone and industry needs to do
more to up-skill the UK workforce.
Foreign Investment
Over the years, there has been a shift in opinion
regarding foreign ownership and investment in
British-based companies and industries. Today,
there is less concern about ultimate ownership,
and more focus on the impact on UK jobs and
local investment.
The 2014 attempted takeover of British
pharmaceutical company AstraZeneca by US
drugs manufacturer Pfizer was abandoned,
following concerns that it would lead to the
downgrading of UK-based facilities, substantial
UK job losses and therefore impact on the
viability of the entire sector. By contrast, Jaguar
Land-Rover’s Indian owner, Tata, has invested
heavily in this iconic UK manufacturer over the
years, including the latest £450m investment
announced in November 2015, and turned
what was a failing company into a premium
global automotive manufacturer. The majority
of manufacturers polled this year on the issue
of foreign investment (Q16), were supportive
of overseas funding, with 75% saying they
supported it, an increase from 69% in 2014.
However, although inward investment
seems more acceptable in sectors such as
manufacturing, other areas, such as energy, have
proved more controversial, with many recently
questioning Chinese investment into the new
Hinkley Point C nuclear power station.
The EU Referendum
Following the May General Election, and the
rather surprising result of a Conservative
majority Government, the UK now faces a
referendum in 2017 on its membership of the
European Union (EU). Although most polls point
towards the UK remaining in the EU, the longterm
debate and continuing doubt over the
issue are creating concern for many sectors of
the UK economy, especially in seeking foreign
inward investment. When both the public and
manufacturers were asked what effect this
uncertainty was having on the manufacturing
sector (Q14), a clear majority indicated that it
was negative (public 58%, manufacturers 62%).
Although only 5% of manufacturers and 21% of
the public polled thought the UK should leave
the EU (Q15), there was a clear desire that the
terms of membership should be renegotiated
(public 47%, manufacturers 58%). Enthusiasm to
join the euro also remains decidedly low, with
only 3% manufacturers and 2% public favouring
this option.
Issues such as immigration, EU bureaucracy/
interference and sovereignty of national
parliaments continue to be highlighted as
reasons for leaving the Union. However,
economically, the EU remains a major trading
partner for UK-based companies and uncertainty
over what impact leaving would have on our
export potential is still relatively unknown.
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27

Q14–Q23
RESULTS
UK MANUFACTURING
28 Engineered in Britain: Manufacturing a Successful Economy?

Q14
Do you think the uncertainty surrounding the UK’s
future in the EU is having a positive or negative
effect on UK manufacturing?
■
■
Manufacturers
Public
Positive
5
16
5
9
4
7
No effect
21
28
20
36
24
32
Negative
58
62
44
52
53
61
Don’t know
5
6
7
27
8
11
imeche.org/engineeredinbritain
29

Q15
What do you think would be the best
option for the UK’s manufacturing sector?
■
■
Manufacturers
Public
Don’t know
2
4
32
For the UK to remain
in the EU (no change)
26
47
58
21
2
3
5
For the UK to
leave the EU
For the UK to remain
in the EU but renegotiate
its terms of membership
For the UK to
join the Euro
30 Engineered in Britain: Manufacturing a Successful Economy?

Q16
Is overseas investment into the UK’s
manufacturing sector helping or damaging
British manufacturing companies?
Manufacturers only
Don't know
Neither
7
2015
Damaging
6
11
2014
12
7
13
69
75 75
Helping
imeche.org/engineeredinbritain
31

Q17
Which of the following UK manufacturing sectors do you
believe will see the highest growth in the next 10 years?
Manufacturers only
Composite materials
84
85
2015
2014
Biomedical
82
79
Construction
41
73
Aerospace
58
69
Electronics
54
67
Automotive
52
62
Plastics
39
42
Food and Drink
38
39
Chemical
36
36
Defence
38
25
Steel
13
20
Textile
10
15
32 Engineered in Britain: Manufacturing a Successful Economy?

Q18
What is the biggest danger to the future
growth of the UK’s manufacturing sector?
Manufacturers only
Lack of skilled people
52
Global competition
25
CO 2 emissions and other
environmental restrictions
2
The UK leaving the EU
12
Poor infrastructure in UK
6
Don't know
3
imeche.org/engineeredinbritain
33

Q19
Which of the following do you think have a negative
effect to investment in UK manufacturing?
Manufacturers only
Regulatory environment
37
Tax regime
34
Skills gap
77
Infrastructure
44
Labour costs
43
Exchange rates
33
34 Engineered in Britain: Manufacturing a Successful Economy?

Q20
Which of the following parts of the UK’s infrastructure, if
any, do you consider to be inadequate for the development
and growth of a modern manufacturing sector?
Manufacturers only
Water infrastructure
23
Electricity generation
61
Rail network
70
Broadband and telecommunications
39
Road infrastructure
50
Airport infrastructure
30
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35

Q21
UK manufacturing is lagging behind other developed
countries in its investment in R&D and capital equipment.
What do you believe is the main reason for this?
Manufacturers only
Pressure from shareholders
for short-term return on investment
72
Lack of willingness to take
risks when investing
58
Unable to raise funds to invest
52
Rising costs mean there are
less funds available to invest
49
Lack of vision and commitment
51
Only large companies can make
the level of investment necessary
45
Other
1
Don’t Know
2
36 Engineered in Britain: Manufacturing a Successful Economy?

Q22
How positive or negative do you feel about
the future growth of your company’s order
book over the next 12 months?
Manufacturers only
Neither positive
or negative
Negative
4
37
59
Positive
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Q23
How concerned are you about the
following to your company?
Manufacturers only
Exchange rates
40
Increase cost of supplies and components
60
Increasing energy costs
61
Increasing labour costs
56
Administrative and regulatory burden
53
State of the UK economy
42
State of the Eurozone
76
State of the global economy
77
Bank lending to business
40
38 Engineered in Britain: Manufacturing a Successful Economy?

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