The 2024 Budget has heralded some good news for the UK’s manufacturing sector which, until recently, had been experiencing a fallow period, with new work intakes down due to overstretched supply chains and unstable market conditions.
Nice to have some good news
The Budget has seen the new government make a formal commitment to its Industrial Strategy, promising additional funding to the life sciences, automotive and aerospace industries and signalling its dedication to achieving economic resilience in these key areas.
Who will benefit?
Manufacturers and suppliers, such as Poeton who performs electroless nickel coating for these industry sectors, should start to benefit from a more positive outlook, increased orders and greater long-term certainty. Now that economic stability looks more likely, it is possible for the UK’s manufacturing sector to begin investing in modern methodologies and techniques that will enhance efficiency, boost productivity and keep the UK at the forefront of technological innovations.
There is always some bad news though
Unfortunately, the Budget also announced a hike in employer National Insurance contributions and a rise in the National Living Wage. These could see small to medium-sized enterprises struggle to recruit and retain engineering talent while also achieving a profitable position.
It is possible that funding these cost increases may curtail the investment that is possible, particularly if businesses need to resort to thinning their workforce to maintain affordability as this will limit the new work that they are able to take on.
How manufacturing businesses can thrive
Businesses may need to make difficult decisions about the size and resilience of their workforces and consider alternative methods of resourcing their projects and orders. For example, they may have to use temporary skilled personnel on day rates to deliver specific objectives, rather than employing full-time workers, or target investment into areas that look set to deliver the greatest return, rather than the highest benefit.
By employing lateral thinking and using the additional funding in the most appropriate manner, it is likely that the manufacturing sector will weather this storm and emerge stronger.
