Britain's largest manufacturers anticipate significant increases in orders and output in the second half of the year, despite facing a severe shortage of skilled workers. According to a survey of 320 companies by the trade body Make UK, the manufacturing sector is returning to normal after the pandemic's demand fluctuations, price disruptions from the Russian invasion of Ukraine, and supply chain issues caused by Suez Canal blockages.
Make UK reported that the proportion of businesses seeing an improvement in order books has doubled in the past three months, driven primarily by strong export demand from the US, compensating for weak domestic conditions. Optimism is bolstered by cooling prices and the prospect of interest rate cuts, with business confidence matching its highest level in a decade. Manufacturing is expected to grow by 1.2% in 2024, outpacing the projected GDP growth of 0.9%.
However, this optimism is tempered by a persistent shortage of skilled workers, which companies say must be a priority for the next government.
Prime Minister Rishi Sunak plans to close underperforming university courses to fund 100,000 new apprenticeships over five years. In contrast, Labour proposes allowing employers to use up to 50% of their apprenticeship levy on accredited non-apprenticeship training under a new growth and skills levy, offering more flexibility in fund usage.
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