UK is ‘global manufacturing destination’

Global manufacturing executives rank the UK as one of the top destinations for future profit growth.

16% of respondents to the KPMGsurvey said they expect to source more in the UK, higher than Germany, India and Brazil.

China and the US still lead, with global manufacturers seeking to increase sourcing in those countries by 34% and 37% respectively.

Of those who expect to increasingly source from the UK, 92% said this would involve research and development (R&D) and 81% said the investment would include product design and development.

The majority of respondents said the goods would involve significant intellectual property (75%).

Britain is ranked ahead of established manufacturing economies such as Japan and Germany, as well as emerging economies like India and Brazil.

KPMG’s 4th annual Global Manufacturing Outlook, which surveyed 335 executives globally, also reveals that companies are increasingly looking to the UK to provide key skills and resources in the supply chain, with the
UK being the third most popular destination for increased sourcing.

“There are a number of things that make the United Kingdom attractive to foreign investors,” said Stephen Cooper, KPMG UK Head of Industrial Manufacturing.

“We have a relatively low corporate tax rate and our legal system provides good IP protection for businesses trading in the UK. The latter may not be said with the same degree of confidence for a number of other emerging economies.

“In addition, over the past few years, the weak pound has made UK goods relatively cheaper in the global marketplace. These advantages have contributed to the year on year increase in exports since 2009.”

Manufacturing executives are also positive about the future prospect of the economy.

36% of respondents said they expect the economy to grow by between 0.1% and 1.9% over the next 12 to 24 months; 22% think it will grow by between 2% and 3%, while 15% said it will neither grow nor shrink.