2016 may be tough for UK manufacturers as confidence eases
The year 2016 may be challenging for Britain's factories as the easing confidence and risks are outweighing opportunities, according to a new research. The manufacturing companies will have to contend with the ongoing global economic hangover this year too, forecasts an industry body.
Majority of UK-based manufacturing companies were suspecting challenging situation in the days to come in the survey. Two out of the five among 286 companies that participated in the survey agreed that there would be risks in the business. Many larger manufacturing firms are pessimistic about the business prospects in 2016.
According to a report by Express, many manufacturing firms are planning for growth, while they're anticipating similar challenges faced in 2015. Terry Scuoler, chief executive of the former Engineering Employers' Federation (EEF), which carried out the study, said: "The gloom that took the shine off manufacturing performance in 2015 is set to continue into 2016."
However, manufacturing firms in the UK are prioritizing their investment. They're keener on technology and innovation. UK manufacturing firms are also exploring new export markets to sustain their production levels.
The annual executive survey by manufacturers' organization EEF and financial group Aldermore, manufacturers expect 2016 to be a year of tough decisions and more prominent risks, as reported by Liverpool Echo. Faltering confidence may continue through 2016 and opportunities are outweighed by risks. About 23 percent of companies participated in the survey see more opportunity than risk, while 44 percent of companies see more risks.
Despite tough conditions predicted for 2016, the UK manufacturing industry is investing in technology and innovation, while exploring exports markets, indicated the survey. Restructuring and cost control are top priorities of the UK manufacturing companies.
The survey has also referred the warning from Chancellor George Osborne about a "dangerous cock tail of economic risks" chimed with concerns reported by manufacturers. Experts term the latest survey as a new wake-up call to the British government.
The Telegraph has reported that worldwide economic risks threatening the UK manufacturing industry. One-third of UK manufacturing sector are going for the across the board cuts. 34 percent of the UK companies have taken up restructuring their operations and trimming headcount further.
Scuoler further added: "With worries extending to the competitiveness of the UK business environment, this is a wake-up call and I would urge the Government to continue to work pro-actively with industry to mitigate risks and boost opportunities for our sector."
The UK's economic recovery seems to be in more challenging situation. In 2013-14, Britain was the fastest growing economy among the G-7 nations.