A recent report by the Food and Drink Federation (FDF), the authoritative UK industry body, indicates that manufacturing leaders are optimistic about the future, stating they have “turned the corner” and are eager to increase their investments.
According to the FDF’s State of Industry Q2 2024 report published on August 15, an impressive 90% of food and drink manufacturers anticipate maintaining or enhancing their investment levels within the next year.
This positive outlook comes on the heels of previous challenges, including inflationary pressures in supply chains and consumer pushback against price hikes.
“This is a signal that the sector has turned the corner after the policy turmoil and external shocks that have disproportionately impacted food and drink businesses, leading to a 30% drop in investment since 2019,” the report concluded.
Furthermore, the FDF has urged the newly-elected Labour government to implement strategies that will unlock the full growth potential of this vital sector.
The findings reveal that manufacturers are actively seeking opportunities to make long-term investments in their manufacturing processes and supply chains. Additionally, over a third of the manufacturers plan to boost their research and development spending in the coming year, demonstrating a commitment to innovation in the food and beverage industry trends.
Nonetheless, the report highlights ongoing concerns regarding policy and regulatory uncertainty. Manufacturers continue to express apprehension that non-tariff barriers may adversely affect the industry’s export competitiveness.
Balwinder Dhoot, director of sustainability and growth at FDF, commented: “Despite investment in our sector being down by a third compared to 2019, it’s encouraging that manufacturers are planning to increase or sustain their investment this year.”
Furthermore, he emphasized, “A well-crafted industrial strategy – working in partnership with the UK’s largest manufacturing sector – will also allow us to seize investment opportunities and tackle some of the nation’s critical challenges around food security, health, productivity, and net zero.”
“It is crucial for government to help establish a stable business environment that removes the burden of unnecessary and costly regulation and bureaucracy.”
The report also advocates for reforms to the national Apprenticeship Levy, indicating that such changes would significantly benefit the industry by addressing skill gaps and labor shortages. More than half of the manufacturers expressed a desire to allocate levy funds for engineering conversion modules or business improvement techniques.
