The Hazard Warning Report, launched by Zurich Insurance plc, highlights that manufacturers are looking beyond the UK to emerging markets and that, contrary to popular belief, they are not finding a lack of credit will hold back the growth of their business.
The Hazard Warning Report is an in depth study of owner-managers within the mid-market sector - those companies with a £5m-300m turnover - combined with qualitative analysis that highlights the key concerns for UK manufacturers and, most importantly, the opportunities and challenges they face in the years ahead.
With domestic demand at a stand-still, the study shows that UK manufacturers are looking abroad for further opportunities, namely to China and India, with just under a half (47%) of firms recognising that the onus is on them, rather than government or regulators, to break into these new markets. However, with 60% of the larger businesses feeling exposed to the risks associated with emerging markets, it is clear that heading into unknown territory can be both an opportunity and daunting prospect.
Currently, the top challenge facing UK manufacturers is the uncertainty of the economy (34%), followed by the need to break into emerging markets and - intrinsic to this sector - supply chain issues. At the bottom of the list, and perhaps surprisingly, only 2% of manufacturers cited availability of credit as a key challenge to the future of their industry.
The need to attract skilled workers is not a key concern for manufacturers and this, alongside sustainability, is listed as one of their lowest priorities; only 2% of companies feel that green issues are important to the growth of their business, perhaps showing how, in poor economic conditions, government policy on sustainability makes little to no difference to these businesses.
Steve Green, European middle market network leader, Zurich Insurance plc said: "The manufacturing sector has always been a key indicator of how well the economy is faring. This analysis shows that, even in times of unstable growth, not only are UK manufacturers optimistic about the future but unfazed by the rhetoric surrounding a lack of finance.
“The findings show that manufacturers have a cautious optimism about the year ahead, that they are excited to break into new markets but perhaps require the necessary insight and expertise in order to achieve this goal."
