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FRP Advisory Trading Limited

General election ‘24: What does it hold for manufacturers?

So far, 2024 has brought good news for UK manufacturing.
Manufacturers i Stock 614956932 1536x1024

May’s purchasing managers’ index (PMI) showed that the sector’s output is growing at its fastest pace in two years, supported by healthily expanding order books. Against this, producers’ expectations of future growth climbed to their strongest since February 2022.

While this paints a picture of a sector emerging from what have been volatile conditions, manufacturers are clear that achieving further growth and maintaining it over the long-run will be predicated not just on fair economic winds, but on direct support and investment in the industry.

Indeed, they view the looming general election as an opportunity to unlock this. But what do manufacturers want to see from an incoming government and what is it likely to deliver?

Planning ahead

A good starting point is Make UK’s ‘Makers’ Manifesto’.

Top of the industry body’s wishlist for the future are improved conditions within which to attract investment, delivered via a consistent, long-term industrial strategy.

Promises of such long-term plans have already been made. Both Labour and the Liberal Democrats have said they will publish fresh industrial strategies if they were to take power, and both have put this in the context of what they see as a need for a greater certainty across the economy.

Alongside putting a new plan in place, the Liberal Democrats have committed to reestablishing the Industrial Strategy Council – an ‘impartial and expert’ body, abolished under Kwasi Kwarteng, with the purpose of monitoring progress against national strategy. Meanwhile, Labour has stressed that its plan would also inform national procurement and trade policies – the latter being another area where manufacturers are calling for further support.

The Conservatives haven’t committed directly to a fresh, overarching industrial strategy. However, they have set out support for specific manufacturing subsectors – chiefly automotive, those manufacturing components for renewable energy projects and ‘strategic’ sectors, such as aerospace and life sciences, through the already-announced Advanced Manufacturing Plan. By virtue of a pledge to increase military spending to 2.5% of GDP – a figure Labour has also committed to – it will also bolster those operating in the defence supply chain.

The value of having a long-term strategy is clear. A trusted, well-understood industrial roadmap makes it easier for businesses to plan and invest with certainty, and builds confidence in their supply chains and lenders.

In contrast, a shaky policy foundation can breed a reluctance to commit to decisions or funding, stymie inward investment and – at worst – result in missed opportunities and even the collapse of businesses and local supply chains.

Manufacturers will want to see these big plans carried through.

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