State of industry report Q2 2024
14 August 2024
The findings reveal that food and drink manufacturers are seeking out opportunities to make long-term investment decisions in manufacturing and supply chains that are needed to secure our food supply and to create healthier and more sustainable products for UK and global consumers. Advancing innovation and adopting new technologies are critical for economic growth, and to safeguard the UK’s long-term food security. Notably over one third of manufacturers plan to increase their R&D spend over the coming year.
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Download (582 kb)Executive summary
- Business confidence fell to -6% in Q2, the first negative result since Q2 2023. A sharp drop in SMEs’ confidence was the main driver of the overall fall in confidence.
- 70% of manufacturers are primarily focused on growing UK sales, with new product development ranked as the second highest growth strategy.
- About half of the respondents are planning to keep their investment expenditure on R&D, skills and training, and buildings unchanged, while over half (56%) are planning to increase their investments in plant and machinery.
- Uncertainty about demand and changes to the business environment (50%) and uncertainty about upcoming regulation (47%) will continue to limit investment.
- The new government should prioritise the UK's relationship with the EU (50%), employment and skills policies (39%) and packaging reforms (36%).
- Industry’s labour shortages stood at 4.9% compared to 5.0% in Q1, and remained above rates in wider manufacturing (2.6%) and the UK (2.8%). Skills shortages continue to impact different roles and levels, from engineers and managers to factory operatives.
- 58% of manufacturers would like funding prioritised for novel and alternative packaging, and 55% for resource footprint measurement and reduction.
- 62% of respondents would like to use Apprenticeship Levy funds for first line manager development, and 56% for both business improvement techniques and engineering conversion modules to upskill.