The latest quarterly CBI Industrial Trends Survey shows that the UK manufacturing sector is performing well, with domestic orders rising at their fastest rate since July 2014 (+16 per cent) and export orders rising moderately at 5 per cent.
Optimism is high, with British manufacturers saying they are feeling confident about their business situation and exporting prospects. 27 per cent plan to increase spending on product and process innovation in 2017.
Rain Newton-Smith, CBI chief economist, says: “UK manufacturers are firing on all cylinders right now with domestic orders up and optimism rising at the fastest pace in two years.
“The weaker pound is driving export optimism for the year ahead, but is having a detrimental impact on costs for firms and ultimately for consumers.
“The new Industrial Strategy can support our manufacturing base by offering a shared long-term vision for the key sectors and regions of the economy and evidence-based plans for government and business collaboration.”
Other research published today shows that British car manufacturing has reached a 17-year high as global demand hits record levels. The report, issued by the Society of Motor Manufacturers and Traders (SMMT), shows that 7 million cars were built in the UK in 2016, an 8.5 per cent uplift on total production in 2015 and the highest output since 1999.
More cars are now being exported from Britain than ever before, with more than 1.35 million cars shipped worldwide. Investment over recent years in "world-class production facilities, cutting-edge design and technology and one of Europe’s most highly skilled and productive workforces" is largely attributable to the steep increase in exports. More than one in two cars exported to Europe, the UK's single biggest trading partner, with demand up 7.5 per cent.
Commenting on the findings, Mike Hawes, SMMT Chief Executive, said: "The tremendous growth in UK production is testament to the global competitiveness of the UK automotive sector.
“High class engineering, advanced technology and a workforce committed to quality have helped turn around the industry, making the UK among the most productive places in Europe to make cars. Significant investment in new plants and products over the past few years has driven this growth, not a post-Brexit bounce. We want trade deals but they must be the right deals, not rushed deals. Failure to do so could damage UK automotive manufacturing beyond repair."
R&D tax credits – money back for innovation
Research & Development (R&D) tax credits have proved to be a major boost to British business, but many are still unaware that they can claim the credits to help fund research and development, often incorrectly thinking that their on-going investment in product and process innovation, i.e. the enhancement of existing products and services, does not quality because it is “just what we do”.
Having helped many businesses across a variety of sectors make significant ‘money back for research and development’ claims when some were previously unaware they could, we know first hand how important the R&D tax credit scheme is in encouraging innovation and increased spending on research and development activities by companies operating in the UK.
Our R&D tax credit specialists are therefore on hand to maximise the value of any potential claim and manage the often complex process on your behalf.
Beavis Morgan – advisers to SMEs in the manufacturing sector
At Beavis Morgan, we specialise in working with SMEs and entrepreneurial people across a wide range of sectors including manufacturing, providing guidance and strategic advice to help in formulating plans for your business in order to strengthen its prospects of success, achieve growth and maximise wealth.
If you would like to find out more about how we can help you plan your business efficiently and navigate the maze of tax issues for you and your company whilst taking advantage of the various tax incentives such as the government R&D tax credit scheme, contact Steve Govey or your usual Beavis Morgan Partner.