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Following the release of the latest UK Manufacturing PMI today (1 November), Chris Barlow, Partner at MHA, warns that unless the UK government spells out what a ‘levelled up’ economy means for manufacturers, they will be unable to plot a path to achieving it: “The manufacturing sector’s recovery from the double impact of Covid-19 and Brexit is in real danger of being derailed. Despite demand remaining high, the ongoing threat of supply chain issues and rising costs of both materials and energy prices alongside long-standing skill shortages continue to hamstring UK manufacturers and must be addressed by the government as a priority.
“The sector needs, at the very least, a medium-term industrial plan to address the ongoing skills shortage. With so much riding on the transition to a carbon neutral economy, it also requires greater investment from the government to develop a green and technologically advanced nation. The Chancellor professed his grand ambition of a “levelled up” economy at last week’s autumn budget, but UK manufacturers need far greater clarity on what that means for them in practice, led by a minister who can truly represent a sector that contributes so much to UK plc and is so vital for its future. If businesses cannot envisage the future, how can they plot their path to achieving it?
“Last week’s budget was also a missed opportunity to address the plethora of ongoing challenges facing manufacturers. The confirmed extension to the annual investment allowance, business rates changes and the small increase in scope for qualifying costs for Research & Development (R&D) tax relief won’t provide significant help to the real problems businesses are facing, especially as they are getting hit by rises in staffing costs due to increases to national minimum wage, living wage and national insurance.”
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