It seems there is plenty on the minds of UK manufacturers as 2018 dawns – and while they are apparently more optimistic about the global economic outlook than they have been since 2014, some key risks are weighing them down.
That is according to a new EEF/
AIG survey which has revealed that 40% of manufacturers are planning for growth in their industry this year, while 19% expect deterioration. However, while sales growth appears to be promising there is a growing balance of companies – 26% compared to 23% last year – that sees more risks than opportunities in the year ahead.
Top of those lists of concerns, unsurprisingly, are Brexit related themes – such as rising costs and sterling volatility. In addition, however, there are some key insurance related concerns that are looming large – cyberattacks are apparently on the radar for 62%. There are plans in place to mitigate cyber risks, and insurance is likely to play a key role in that response.
“Far from being blinkered by Brexit, manufacturers have other risks on their radar, including their exposure to cyber breaches, with over six in 10 saying that disruption due to a cyberattack was on their risk radar for the year ahead,” the report states. “Other risks identified include the capacity implications of subdued investment and other international ‘what ifs’, including an increase in protectionist sentiment in the US.”
Commenting on the outlook, EEF chief executive Stephen Pipson remarked that manufacturing investment sentiment is finely balanced.
“Manufacturers left 2017 in an upbeat mood and are set to outpace the rest of the economy again this year as the growth in global trade continues to gain momentum,” he said. “That is not to say everything in the 2018 garden is rosy, however, as there are plenty of factors that could puncture this positive picture.”
Simon Gallimore, manufacturing industry UK lead for AIG, thought that the emphasis on cyber was particularly noteworthy.
“It is interesting to see that cyber security is front of mind for executive leaders,” he said. “A cyberattack can swiftly interrupt the supply chain, potentially causing severe disruption to manufacturers. As technology and data start to play increasingly critical roles in the industry, companies will inevitably find themselves more vulnerable to cyber breaches.
“Manufacturing is key to the UK’s performance on the world stage, and plays important part in improving the health of the economy. Robust cyber security measures and thorough employee training on cyber security are vital to help protect against the increasing threat of attacks.”
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