Second wave of GE High Tech Manufacturing Index shows most are optimistic about business conditions for sector, but cautious about investment
London, August 22nd 2011; GE today releases its latest six monthly High Tech Manufacturing Index shows UK's high tech manufacturers are still optimistic about current business conditions and future prospects, although remain cautious about the general economy and business investment.
Over three quarters (77%) of the 403 UK high tech manufacturers surveyed said they felt either fairly positive (48%) or very positive (29%) about their current business situation.
Compared to the last Index survey conducted in December 2011, current sentiment about the current performance of their business remains strong, with the net positive score amongst those polled increasing slightly from +68 to +71 from Dec 2010 to June 2011.
In contrast those surveyed were still downbeat about general economic conditions in the UK. In Q4 2010 31% said they felt 'fairly positive' or 'positive'; about the general economic situation in the UK, in June 2011 this figure is little changed (30%). However they were slightly more optimistic about the next 12 months. 40% of those surveyed said they thought the general economic situation in the UK would get a little or a lot better over the next 12 months. This compared to 38% who responded in the same way in the last quarter of 2010.
GE UK CEO Mark Elborne said; "UK high tech manufacturers are optimistic but it is not surprising they are being cautious about business investment. They see great opportunities in international markets and growth sectors such as green technologies but have to be careful about these decisions because they feel there is continued economic uncertainty. However the optimism of the survey shows high tech manufacturing is a robust and successful sector for the UK that can help rebalance the economy."
'Star sectors' topped by aerospace and precision engineering
UK high tech manufacturers regard the quality of British products and Britain's strong manufacturing heritage as the most important selling points for the sector as it strives to be internationally competitive. The UK's impressive R & D capabilities and good image abroad were also seen as strong supporting factors.
When asked to name UK high tech manufacturing's top five 'star sectors', respondents put aerospace in the number 1 slot, following by pharmaceuticals; life sciences; chemicals and construction products, materials and systems.
When asked to name the top five specialist areas where they felt the UK could be considered a world leader, 75% said precision engineering was a major expertise area, followed by customisation (customer driven bespoke items), cited by 66% of respondents, followed by advanced materials (56%), support services (54%) and low carbon and environmental technologies (48%).
In terms of potential new 'star sectors' the development of renewable energy and green technologies were the most mentioned areas, with customisation and bespoke work, advanced materials, life sciences and nano-technology also frequently cited by the group.
Business regulation is hindering competitiveness
When asked what factors were helping and hindering the current competitiveness of UK high tech manufacturing, the top 'help' factors cited were quality of goods (+72 net help score) and the UK's strong manufacturing heritage (+53) with the UK's research and development capabilities (+31) and the UK's general image and reputation (+22) also helping.
Top 'hinder' factors cited were the burden of regulation on business (-55 net help score) followed by an absence of a specific government strategy (-51) and the availability of suitable skilled workers (-45). Other issues mentioned were the lack of access to finance (-46), the UK business tax regime (-43) and the quality of the UK education system (-13).
Last Six Months
Although one in three firms (29%) surveyed said they were now operating at close to or full capacity, nearly half (46%) of these businesses in this situation said they had yet to put arrangements in place to step up their capabilities. The general economic uncertainty was one reason for this caution.
Overall, compared to the last Index survey conducted in December 2011, current sentiment about the current performance of their business remains strong, with the net positive score amongst those polled increasing slightly from +68 to +71 from Dec 2010 to June 2011.
Over three quarters (77%) of the 403 UK high tech manufacturers surveyed said they currently felt either fairly positive (48%) or very positive (29%) about their current business situation.
In contrast they were still downbeat about general economic conditions in the UK. In Q4 2010 31% said they felt 'fairly positive' or 'positive'; about the general economic situation in the UK, in June 2011 this figure is little changed (30%). However they were slightly more optimistic about the next 12 months. 40% of those surveyed said they thought the general economic situation in the UK would get a little or a lot better over the next 12 months. This compared to 38% who responded in the same way in the last quarter of 2010.
Mark Maguire
GE
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