Underrated UK manufacturing has a strong future says CBI
July 25th 2007

Businesses that manufacture have a strong future in the UK, but Government policy has not caught up with the changing dynamics of the sector, the new CBI Manufacturing Council chairman has commented.

Speaking at a CBI event in Banbury Oxfordshire, Mr Reynolds Smith, executive director of GKN, told business leaders:

“Manufacturing is misunderstood. Public opinion is of a small, declining sector, owned by foreigners and on the brink of being totally offshored to China.

“But in fact there are over 150,000 businesses that manufacture in the UK, turning over £500bn. Last year they accounted for 60% of UK exports, worth £220bn - which is an increase on the previous year. And 21 of the FTSE 100 manufacture goods including pharmaceuticals, machinery and food.”

Mr Reynolds Smith stressed that manufacturing is not a stand-alone function concerned with making products, and that many businesses that manufacture also research, market, deliver and service their products.

He added: “Manufacturing is no longer just about a factory floor. We must stop thinking of manufacturing companies, and think of ‘businesses that manufacture'. Research creates new ideas, which are then developed and designed into products, which have to be made, sold, shipped and serviced.

“In today’s environmentally conscious world, businesses are increasingly responsible for the whole life-cycle of their products, including disposal and recycling at the end of their life.

“To be sustainably successful in manufacturing, we have to perform in every aspect of manufacturing, and integrate that performance across the whole business."

He continued: “We must not be complacent - these are challenging times for businesses that manufacture. Competition is fierce and global, and government policy can mean the difference between success and failure, between growth and stagnation, between doing business here in the UK and moving it overseas.

“Manufacturing is changing rapidly. If government is to play its part in enabling modern UK manufacturing to compete on the world stage it needs to believe in manufacturing and understand that it has an important role to play. A good start has been made, but there is much left to do."

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