When asked how the current economic climate has affected total R & D budget for the next two to three years , only 17 % of respondents said it had increased . Despite this , 76 % of respondents said they have ideas for new products to be manufactured in the UK , but more than half ( 51 %) said there was something preventing them from bringing the product ( s ) to market .
Nick says , “ A significant number of firms are talking about survival , whilst some are talking about pivoting and pinning future growth prospects on new products or materials . The challenges indicate they are looking for further investment to support their growth and expansion , however they are struggling with energy costs and increasing interest rates . Several firms are looking to reduce the level of borrowing which could also constrain future growth by limiting capital investment plans .”
Energy efficiency was the leading area triggering R & D investment , with 40 % of respondents increasing their investment in this area .
A significant number of firms are talking about survival , whilst some are talking about pivoting and pinning future growth prospects on new products or materials .
Nick adds , “ These issues are well documented , but reiterate the challenges that SME manufacturers are currently facing . The drop in future sales expectations is likely to be the key factor in constraining growth , which is further highlighted by most respondents reporting they are not expecting to see growth , but a decline in future sales . This is a substantial shift of more than 10 % of respondents since last quarter ’ s survey .
“ In relation to the Growth Plan 2022 announced on 23 September , the majority of firms did not have confidence this was going to help their growth prospects . However , since our Manufacturing Barometer went live , we have experienced further political change , with many policies reversed and a new Prime Minister announcing new measures . It is clear from responses this quarter that many SME manufacturers would welcome further financial support to offset rising costs and help support growth plans .”
SWMAS runs its National Manufacturing Barometer on a quarterly basis . To see the full report for the August – October , please visit : www . swmas . co . uk / knowledge / national-2022-q2
To find out more about the South West Manufacturing Advisory Service , please visit : www . swmas . co . uk
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