3 minute read - 19th August 2024
Report shows majority of food and drink manufacturers expect to maintain or increase investment levels
The Food and Drink Federation (FDF) has published its Q2 State of Industry Report, which tracks business confidence and trends in the UK’s largest manufacturing sector. The new analysis reveals that nearly nine out of ten food and drink manufacturers expect to maintain or increase investment levels over the coming year. FDF says this is a signal that the sector is starting to turn a corner after the policy turmoil and world events that have disproportionately impacted food and drink businesses, leading to a 30% drop in investment since 2019.
The trade body added that a robust Industrial Strategy will be key to the food and drink industry seizing investment opportunities and removing barriers to growth. Advancing innovation and adopting new technologies are critical for economic growth, and to safeguard the UK’s long-term food security – notably over one-third of manufacturers plan to increase their R&D spend over the coming year, according to the latest data.
The report also found that businesses remain concerned about policy and regulatory uncertainty, and that non-tariff barriers could risk denting the industry’s export competitiveness. FDF stresses there is an opportunity to remove these obstacles and drive domestic and international investment to increase growth, productivity, and good jobs. Health certificates are an export barrier for 40% of businesses, administrative costs are an issue for 54% of manufacturers, and half of the industry sees an improved relationship with the EU as a top priority.
Almost nine out of ten food and drink manufacturers expect to maintain or increase investment levels over the coming year, according to a report from the Food & Drink Federation / Picture: Getty/iStock
Bal Dhoot, FDF’s director for sustainability and growth, said: “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. By working in partnership with government we can seize investment opportunities and remove barriers to growth. It is crucial for government to help establish a stable business environment that removes the burden of unnecessary and costly regulation and bureaucracy. We are pleased with government’s efforts to improve relationships with the EU and reducing barriers with this significant trading partner.
“Providing targeted support for smaller businesses – who make up 97 per cent of our sector and who are disproportionately impacted by these costs and pressures – must be a priority. This approach will help make the UK the best place to invest and innovate in food and drink production.”
The State of Industry Report also highlights that reforms to the Apprenticeship Levy would help the industry thrive by addressing both the skill gaps and labour shortages. Over half of manufacturers would like to be able to use the Levy funds for engineering conversion modules or business improvement techniques.
You can download the full report below:
