Government urged to back manufacturers’ growth ambitions
The Government has been urged to back small and medium-sized (SME) manufacturers’ growth ambitions after fresh data showed it could give the economy an £83bn boost.
Make UK and Citivas’ new report proposes that if SME manufacturers hit their targets the UK’s manufacturing sector would boom to 7th in the world. It currently stands at 12th.
The research lists the top barriers to growth as shortages in engineering and leadership skills and financial access.
Four out of five SMEs said they had issues when accessing finance during critical early growth stages.
The report calls on the Government to introduce a 150 per cent capital allowance, that would reinvest in SME growth.
It also highlights the need for an improved Growth Enterprise Scheme to support SME’s developments.
Software developments were among the recommendations, with calls for an Estonia-style digital platform to streamline government support and leverage data collected by the HMRC and Office of National Statistics.
The initiatives would aim to improve SME engagement with government schemes, after the report revealed 33 per cent of SMEs were unaware of the Business Growth Fund, and 37 per cent did not know about the British Business Bank.
Amidst this, 80 per cent of SME manufacturers said they face challenges securing finance during critical early growth stages.
Manufacturing sector in downturn
These figures follow the latest PMI manufacturing survey released on Monday, highlighting deepening downturns in the sector.
It showed job losses hit their steepest drop since the pandemic, with staffing levels falling in five out of the last six months.
The index stood at 46.9, falling from 47.0 in January, as the industry battled with the impact of the Autumn Budget.
Make UK’s chief executive Stephen Phipson said the Government “must improve accessibility to skills”.
Phipson added: “Small and medium sized businesses already play a significant part in contributing to growth but, with the right support, they could do even more.
“Helping these firms to export and use data to pinpoint growth potential could result in huge dividends for the economy.”
Jim McConalogue, chief executive of Civitas, said: “Government and industry must put the pedal to the metal to unleash the growth and export potential of Britain’s great SME manufacturers.”
“This will mean resolving the blockages where more than a third often lack awareness of existing programmes available across finance, tech adoption, trade or skills, and then improving accessibility, so SMEs can be geared towards growth.”