February 2022

News 0 8 | Plant & Works Engineering www.pwemag.co.uk February 2022 At the start of each year Make UK publishes a survey of the views of Senior Manufacturing Executives of the year ahead. The survey covers a broad range of topics on both the opportunities and risks that companies see, as well as their views on the hot political issues. The good news from the 2022 survey is that manufacturers are much more optimistic about their prospects having weathered the storm of the last couple of years with almost three quarters of companies now believing conditions for the sector will improve in 2022. A similar number also believe the opportunities for their business outweigh the risks, especially as, to date, the sector appears to have seen little or no disruption from the latest Omicron variant to alter this confidence. Indeed, the survey shows companies are more optimistic about their own prospects than they are for the UK or global economies. Furthermore, almost two thirds of companies felt the UK to be a competitive location for manufacturing with just 13% believing it to be an uncompetitive place to do business. To take advantage of these opportunities manufacturers are prioritising improving productivity, investment in their people as well as new product development, while the recent COP 26 summit appears to have accelerated investments in the drive to ‘net zero’. The more positive outlook for growth is reflected across all major markets with 40% of companies forecasting growth in exports to the United States, closely followed by the EU. Around a quarter are looking for growth in Asia and around one in five to the Middle East. However, the EU market is set to see the biggest decrease in exports by 10% of companies while, one year on from leaving the EU, two thirds of companies said that leaving had moderately or significantly hampered their business, with over a half of companies fearing a further impact this year from customs delays due to import checks and changes in product labelling. Overall, however, the survey shows that for those companies that are remaining agile, innovative, and adaptable the upcoming year will see a far more positive outlook after the turbulence of the last couple of years. By MAKE UK chief executive, Stephen Phipson MAKE uk - the manufacturers’ organisation monthly news comment growing their business (54%), or becoming more competitive (51%). The cloud, predictive analytics and Internet of Things came out on top as priority technologies for investment in 2022, while emerging industrial technology applications such as immersive (augmented/virtual reality) and Digital Twins sit in the top 10: The survey results come as Digital Catapult prioritises stimulating advanced digital technology innovation to help organisations better manage their supply chains in 2022. ‘The UK skills crisis will keep growing unless government and industry take action’. This fear was highlighted by the IET off the back of its recent skills survey which found that less than half of new engineering recruits have either the necessary technical or soft skills needed for work within the industry. The impact of missing skills means 45% of companies who see a skills shortage within young people provide additional training for apprentices/graduates who are new to the industry, whereas a quarter simply recruits fewer apprentices and graduates as a result (25%). Two-thirds (71%) of the UK engineering workforce who are experiencing internal skills gaps say it is down to missing engineering or technical skills. Almost all (96%) engineering employers who had identified a skills shortage within general applicants say that this skills deficit impacts their business in some way. The most common impacts of a skills shortage amongst applicants are around the recruitment pathway – either causing difficulty recruiting (50%) or making recruitment timelines longer (47%). A lack of recruitment from a diverse talent pool may also be fuelling the problem, with only a third of businesses taking action to improve the diversity of their workforce across gender (33%) or ethnicity (30%). When asked what support businesses need from government to improve skills nationally, more funding for apprenticeships came out on top (54%), with more support to train or reskill in priority areas (51%) and better careers advice and guidance in schools and colleges (49%) next in line. Simon Edwards, Director of Governance and External Engagement at the IET, said: “Over the last 12 months the UK has continued to go through economic uncertainty, underpinned by Brexit and the Covid-19 pandemic. This coupled with a drive to deliver on the UK’s net-zero targets and the emergence in engineering companies of new roles with a change to the skill-set required has meant we are seeing a sustained skills gap that will continue to grow unless government and industry take action. “Workers are in high demand but we don’t have them readily available recruits with the right skills to fill the labour market – something we have been reporting via the skills survey for the last 15 years. “Frustratingly nothing has changed. Additionally, this year, engineering employers are reporting a general lack of applicants for roles causing more difficulty in recruitment (34%) – a marked increase in 2020 (22%). Engineering companies across the UK now have to look to improve profitability and productivity with fewer staff than before. “We are urging more businesses to provide work experience opportunities for young people to help with the rollout of T Levels and more apprenticeships. To solve this skills crisis there needs to be deeper engagement between government, employers, and the education system to produce a talent pipeline that can sustain a thriving UK economy. “The IET has already started engaging with government by calling for the embedding of engineering in the existing science, technology and mathematics learning at primary school.” Engineering skills crisis prompts calls for urgent government action