The vast majority (95%) of manufacturing executives across Europe and the Middle East say that maintaining a sound balance sheet and improving cash & working capital management are currently top priorities for their business, according to KPMG’s third Business Leaders Survey*.
Stephen Cooper, UK head of diversified industrials at KPMG, said: “The global financial crisis has been a wake-up call for many manufacturers. The vast majority have now incorporated a more focused and sustainable approach into their business strategy.
By doing this, they have reduced their reliance on credit. This means if the economic climate worsens they won’t have to resort to one-off impulsive fixes. Clearly, manufacturers have learnt a valuable lesson in cash management which in today’s volatile climate puts them in a better position than many of their counterparts in other industries to focus on growth and contribute to the UK’s growth plans.”
Aside from improving cash and working capital management, the survey finds that the top priorities for manufacturing businesses in Europe & the Middle East are:
- Changing business operations to realise cost efficiencies (42%)
- Innovation through product development (35%)
- Looking for growth in emerging markets (31%)
- Exploiting growth opportunities through successful transactions (28%)
Looking ahead, four-fifths (82%) of manufacturing executives agree that they will need to capitalise on ‘megatrends’ such as emerging markets, efficiency of resources or sustainability. They believe that such activities will better equip them to withstand market challenges such as increased regulation, shortages of raw materials and non-traditional competitive threats from new competition in a changing market environment.
Stephen said: “Despite volatile market conditions, the manufacturing sector is growing. We can see that future growth opportunities are very much on manufacturers’ minds and focus on growth through emerging markets is creeping up the agenda.”
In the long run however innovation through product development is expected to be a key driver for the manufacturing sector. At the moment 43% of manufacturing executives believe that a shift towards the commercialisation of current technologies and products over traditional research and development is expected in the near future.
“The government will need to play its role in this movement if the UK’s manufacturing-base is to benefit from the commercialisation of current technologies. Business-friendly intellectual property laws and targeted incentives will be required if the UK is to become a pioneer in technologically innovative products.”
Ends
Note to Editors:
KPMG’s Business Leaders Survey
Full findings from KPMG’s 2012 Business Leaders survey can be viewed here.
*KPMG’s Business Leaders Survey polled almost 3,000 senior executives across 31 countries and 18 sectors. 323 senior executives out of the 3,000 were from the diversified industrials (metals, aerospace & defence and manufacturing) sector.
This is the third “Business Leaders” survey conducted by KPMG. Conducted online between 9th – 26th January it is based on the views of respondents from 31 countries (Austria, Bahamas, Bahrain, Belgium, Bermuda, Cayman Islands, Cyprus, Czech Republic, Denmark, Dutch Caribbean, Germany, Greece, Ireland, Italy, Jordan, Kuwait, Luxembourg, Malta, Norway, Oman, Poland, Portugal, Qatar, Romania, Saudi Arabia, Slovakia, South Africa, Spain, UAE and UK). Designed to identify where executives are focusing today and what the most important topics for their organisations are, the survey is carried out regularly in order to monitor trends and identify how are business needs evolving in the current environment.
For further information please contact:
Arti Mohan, Corporate Communications
Tel: 020 7694 8735
Mobile: 07768 858 085
Email: arti.mohan@kpmg.co.uk
KPMG Press Office: 020 7694 8773
Twitter: @KPMG_UK_LLP
Note to Editors:
About KPMG International
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 152 countries and have 145,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
