The UK's new trading relationship with the EU as well as the attractiveness of the UK for investment and talent play a part in the reported fears.
Despite this, more companies believe the opportunities outweigh the risks for their businesses as many plan significant investments in boosting productivity and agility.
UK manufacturers are also more confident about the prospects for their own companies than they are for either the global or UK economies.
The 2021 Make UK/PwC Executive survey shows that a third of companies believe the investment prospects for UK businesses will decrease having left the EU, with just 18% of companies believing they will increase. In addition, just over a quarter of companies (26%) believe exports to the EU will fall with just 16% believing they will increase.
Furthermore, a third also believe the UK’s ability to attract international talent will decrease with just 11% believing the UK will be a more attractive destination outside the EU. According to Make UK this potentially puts at risk the ambition of the government’s new immigration system which is specifically designed to encourage the best talent to come to the UK.
The survey also shows that customs delays are seen as the biggest risk to companies (47%) while concerns over national and local lockdowns were the second biggest risk (46%). Furthermore, increased costs of regulation is reported as the biggest risk by just under forty per cent (39%) while over one in 10 companies (14%) also believe a relocation of a major customer out of the UK is their biggest risk.
Commenting, Make UK chief executive, Stephen Phipson, said: “The transition to new trading arrangements with the EU was always going to be the biggest challenge facing manufacturers this year and the fact we have an agreement in place doesn’t alter that. However, just as the sector rose to the challenge of aiding the national effort at the start of the pandemic, it is clearly set to do so again as we re-build the economy and take advantage of the opportunities from digital technologies.
“To ensure we cement the role of industry in the future economy we need to see a strategic vision from government for the whole economy across the UK. This must go way beyond short term tinkering and involve an industrial strategy that takes at least a decade long horizon with the whole of Government putting its shoulder to the wheel to deliver it.”
The survey of 206 companies was conducted between 11 and 30 November 2020.
Make UK www.makeuk.org