EEF 2018: UK Manufacturing industry is an economic “bright spot”

Following an unprecedented year of UK political upheaval, the EEF annual conference painted a picture of a sector preparing for change, looking to capitalise on opportunity and facing up the challenges ahead. Leanne Taylor reports.

In his first address to the EEF annual conference as its new CEO, Stephen Phipson said in a challenging political environment the sector must work together for mutual benefit. Through sharing knowledge and experience, the UK manufacturers had the opportunity to share a sense of community that would prove invaluable as the “many unprecedented issues” surrounding Brexit take hold.

Phipson outlined access to labour, regulation and trade barriers as the undoubted challenges facing the sector in the coming months, however, said he is confident in the manufacturing industry’s ability to “adapt and change.” He said that EEF is in talks with Westminster about how to “make more” out of the Industrial Strategy, which, he added was “a step in the right direction”, however, must have the manufacturing industry’s priorities at its core.

Despite these challenges, Phipson, said that the UK manufacturing industry is a “bright spot”, owing to record demand in 2017 and a booming export market and that the sector is still seen as “an attractive place to invest” to overseas businesses.

“Spectacularly good news”

Returning keynote speaker, Martin Wolf, Chief Economics Commentator at the Financial Times, delighted delegates by starting his address saying something “important and cheerful”, as he told the audience the UK economy was in “the middle of a very strong global upswing.” However, his celebration soon gave way to caution, stating that risks including inflation, recent US fiscal decisions and a highly leveraged global economy gave “plenty to be concerned about at the global level.”

Where Brexit is concerned, Wolf did not hold back in, stating the Government had taken “an extraordinary risk” in triggering Article 50 before future trading agreements were firmly understood. “At the end of all this, whether we like it or not, we’ll end up with a standstill agreement of some sort,” he explained, adding that a “Canada-type” deal, where the UK gets to trade with the RoW at the cost of a more bureaucratic relationship with the EU, the most likely eventual outcome. He added that should this occur, then the UK economy “should still grow”, although warned it “would be costly.”

Global Reputation

In the first of the political keynotes of the day, Secretary of State for International Trade, Liam Fox MP, told the audience there is “few industries doing as much as manufacturing to enhance the UK’s global reputation.” He said the “mills and foundries may have largely disappeared” but, in their place, is an industry built on expertise and world class R&D, highlighting the composites materials sector as a leading example.

Fox told delegates that priorities for the Government were amplifying export and trade opportunities, stating it is committed to “opening the doors to trade” to companies at all levels of manufacturing, through accessible export finance, support and putting new commissioners in place in rapidly developing countries that are keen to benefit from UK products. He accepted that the sector would feel uncertainty in the light of ongoing EU negotiations, however, that maintaining access to markets in Europe and beyond was at the forefront of the Government’s agenda.

Opportunities for Women

In the afternoon keynote, Jeremy Corbyn MP, leader of the opposition, started by emphasising the key role of skilled women to the manufacturing industries, stating the percentage of women in the STEM sectors was “still too low.” The UK “cannot build a more prosperous economy without utilising the talents of everyone,” he added.

Corbyn told delegates that the Government was not “doing enough to support” the UK’s manufacturers in their search for skilled workers, stating that vocational education would be “at the heart” of a Labour Government’s National Education Service. This, he added, would include introducing the relevant skills at primary school age and realigning the apprenticeship levy to give businesses more opportunity to spend the money available.

Where Brexit is concerned, the Labour leader said that the party has “taken a practical role” in accepting the outcome of the EU referendum, however, stated that businesses “must not be forced to withdraw from European markets”. He added: “We have to have an effective relationship with Europe,” otherwise manufacturing in the UK “simply won’t happen”. Negotiating with respect and not undercutting the EU is the way forward, he concluded.

An attractive prospect

In a change to the usual EEF programme, the organisation gave delegates the opportunity to attend breakout sessions where challenges facing the sector were addressed. In one of the most attended, which focused on sustaining a post-Brexit workforce, the challenges relating to filling the void left by EU nationals was discussed, as well as how to make the sector more attractive to the next generation.

Tim Thomas, Director of Employment and Skills at EEF said that the UK labour market needs to “adapt and adjust” and find new ways to find talent to keep businesses going.

Commenting, Jason Muller, Global Manufacturing Director of cosmetics brand, Lush, said that, like the UK plastics industry, the cosmetics sector relies heavily on workers from the EU. He said to attract and retain local talent, the business had embarked upon a programme of recruiting locally, attending job fayres, targeting colleges and “telling its stories further and wider” about the career possibilities offered by the UK’s manufacturing sector.

Jenny Holloway, CEO of Fashion Enter Ltd, said the country should “be very proud of UK manufacturing.” However, the fashion industry too, is dominated by workers from the EU for their technical skills. In order to bolster the skills of local employees, the company has invested in establishing a training academy for “hands-on learning.” Holloway said that the impending T-Level qualifications due to start in 2020 were “encouraging”, adding “we do need technical qualifications”.

Finally, Cormac Watters of technology and software corporation, Infor, said companies must embrace technology and social media to make a business attractive to the younger people it is trying to recruit. He said research shows employees will value a business that has invested in modern technology and equipment. “We must make manufacturing a destination of choice,” he explained.

Mapping a future path

Where planning for Brexit is concerned, a workshop outlined the importance of mapping exercises to give businesses clear visibility of the impact on processes, supply chains and staff in the short, medium and long term should the UK no longer have access to the single market. “We have to hope for the best and plan for the worst,” said panellist Mike Hague-Morgan, Co-Owner of Autocraft Drivetrain Solutions, however, said that it was important for businesses “not to get completely distracted by Brexit” and to look for “other opportunities.”

Arne Mielken of the Institute of Export and International Trade said that key priority for UK manufacturers from his viewpoint is to train staff in business requirements for exporting and importing so that processes and protocols for trading with other countries are clear and understood, regardless of the outcomes of the negotiations.