It is now nearly two months since the new government was elected and what has become evident is that there is no magic wand when it comes to fixing the challenges in the UK economy.
The UK lost almost a fifth of GDP during the Covid pandemic and while there has been a steady recovery from over the past four years, the economy is still operating at significantly below pre-Covid levels.
There is no doubt that in recent months there has been a modest improvement in some of the economic fundamentals that have been impacting the manufacturing sector in recent months – interest rates have seen their first cut since March 2020 and inflation is back down to near its 2% target.
The challenge now for the new government is how it intends to build on this improving picture and support UK plc get back on a growth trajectory.
In October, Rachel Reeves will deliver her first Budget, and the Prime Minister has already forewarned that that there will be some short-term pain to come in pursuit of balancing the books.
Only time will tell how this ‘pain’ is likely to manifest but the Budget must also deliver an optimistic vision for the future with policies that are going to tackle some of the underlying challenges that are currently holding the UK back.
After a rollercoaster of a year, the UK manufacturing sector pushed back into growth in May as levels of production improved and business optimism hit more than a two-year high.
The S&P Global/CIPS UK manufacturing PMI survey rose to 51.2 in May after falling back to 49.1 in the previous month with any reading above 50 means the sector is in growth.
However, manufacturers believe there are number of key areas that need to be tackled if the sector is going to reach its full potential.
According to the latest survey by MAKE UK, the manufacturing trade body, more than half of manufacturers felt that the national road infrastructure had deteriorated in the last 10 years, making it slower and more expensive to build and export British products.
Manufacturers also want the Government to deliver a formal industrial strategy as well as forge closer ties with the European Union, something we are already potentially seeing following the Prime Minister’s recent visit to Germany, where a bi lateral treaty was discussed aimed at boosting trade, trade and technology.
From a timber perspective, we have seen timber imports nudge ahead of 2023 and we have also seen steady growth for the pallet sector in the first half the year, offering a more optimistic outlook for the sector in the final quarter of 2024.
After numerous false dawns, the onus is now on the Government to take the bold and ambitious steps needed to create the conditions for sustained growth in the manufacturing sector – something we haven’t seen since before the challenges of the pandemic.
