LONDON: UK manufacturers could inject an additional £2.56bn into the UK economy, cut energy consumption by nearly a third (31.6%) and boost their energy resilience by increasing investment in energy technology over the course of the next decade, finds a new report by Barclays.
The Barclays Corporate Banking report, Powering On: Energy Resilience in UK Manufacturing, examines current attitudes of UK manufacturers towards energy supply and management, and models how manufacturers could reduce their energy demand.
The research shows a growing concern about the availability, reliability and cost of energy with more than a quarter of UK manufacturers surveyed (27%) saying that energy supply is more of a concern to their business now than at the start of 2016. These concerns have come to the fore as manufacturers feel squeezed by increases in the price of other raw materials, greater competitive pressure in the sector, and 28% of those who said their business is more concerned said this is because they are worried about the eventual impact of the UK leaving the European Union.
Mike Rigby, Head of Manufacturing, Transport and Logistics at Barclays, said: “Energy resilience and costs are vital considerations for UK manufacturers and are a critical element of our manufacturing sector’s ability to compete internationally.
“In recent months, attention has focused on the future of energy supply but we need to look at all aspects of energy. By considering energy management on the demand side in intensive sectors such as manufacturing, we can ensure the UK remains competitive.”
Chief among manufacturers’ concerns today are energy prices, with 75% of respondents citing this as a worry. Almost half (46%) of manufacturers also believe that they are vulnerable to the effects of significant energy price increases.
Reliability and availability of energy is also a worry with 58% and 45% of manufacturers citing these as concerns respectively.
Longer term, manufacturers are concerned that energy shortages will occur, with more than half expecting these in the next ten years. Most of the sector (63%) believes that they are vulnerable to energy shortages, arguing that current preparations are likely to be insufficient. In addition, a majority (60%) also believe that the risk of cost increases and supply disruption will increase if the amount of energy the UK imports increases.
