BDO insight predict a sharp recovery for UK Manufacturing
In a recent study conducted by accountant and business advisory firm - BDO - the company reported that 95% of manufacturers surveyed predicted that their business would fully recover within a year of a vaccine for COVID-19 being available, with the other 5% believing the recovery to take between 1-3 years.
Surveying 111 mid market manufacturers, the company also found that 47% believed that news of a vaccine would prompt them to change their business plans. In addition to this 53% reported that they felt optimistic about the UK’s economic recovery compared to three months ago. With this optimism, 39% of UK manufacturers plan to invest in technology to increase businesses efficiency in the next six months.
However, while there is optimism, manufacturers are also cautious about the challenges for 2021, such as paying back business loans (19%), further lockdown (17%), market contraction (15), and that the tiered lockdown system will widen regional economic divide (93%).
“The news that vaccine trials have proved effective has given a much needed boost to the manufacturing sector. While this is obviously welcome news, we’re not out of the woods yet. The sad reality is that things are likely to get worse before they get better,” commented , National Head of Manufacturing, BDO.
While Brexit is an ongoing challenge, three quarters stated that they had a strategy in place for the transition.
“The transition into the new trading arrangements with the EU at the end of this year, and the ending of the furlough scheme in the early part of next year will both prove challenging and will test the resilience of many manufacturers. The sobering comments made by the Chancellor in the recent spending review also indicate the general economic challenges to be faced by UK manufacturing over at least the short to medium term. That said, it is very encouraging to see so many manufacturers looking to the future and investing in new technology to improve productivity and competitiveness. This will be vital for long term sustainability and growth,” added Lawton.