State of industry report Q3 2023

04 December 2023

Majority of manufacturers (81%) are prioritising innovation to maintain competitiveness in a challenging market. The increase in the cost of living is changing shopping habits with nearly three quarters 73% of businesses saying they have noticed a shift in demand towards cheaper products.

Against a background of falling investment in the industry, 41% of businesses plan to increase their capital investment expenditure over the coming year and 18% expect a decrease. Some manufacturers have plans of acquiring new equipment or of refurbishing their facilities, while others stated they have no profits to reinvest or that they had to reduce their investment in order to manage cashflow.


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Executive summary

  • The Q3 FDF net confidence score reached 6% in Q3, the first positive value since Q2 2021, a sign that market conditions have stabilised.
  • Labour vacancies rose in Q3 to 6.5% up from 4.8% in Q2, due to increased production ahead of Christmas resulting in more job openings that were difficult to fill. Vacancies persists across all skills levels.
  • 41% of businesses plan to increase their capital investment, while 18% expect a decrease over the coming year. This is against a significant fall in industry investment of 36% in H1 2023 compared to H1 2019.
  • Innovation is key to maintaining competitiveness, hence a top priority for 81% of manufacturers. Grocery volumes are in decline and consumer behaviours are changing, with 73% of businesses noticing a notable shift towards cheaper products.
  • Poorly designed regulation hinders growth. 68% of manufacturers are concerned about forthcoming packaging regulations and 65% worry about upcoming carbon footprinting/ net zero regulations.
  • Manufacturers faced higher costs of 14.2% over the last year, while selling prices rose by 10.0% and pay by 5.2%. Costs are expected to rise by 3.9% over the next year, and prices by 2.7% and pay by 4.9%, on average.

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