UK Government policies towards manufacturing and retailer power are the major concerns of the UK packaging manufacturing and machinery sectors, according to the UK Packaging Business Confidence Survey carried out by Landell Mills Consulting, the Packaging Federation and Total Processing & Packaging 2004.
However 46% of those questioned reported increased sales volumes, predominantly in the flexible plastic, glass and paperboard sectors. But an indication of the pressures being exerted on margins came with just 20% of respondents stating they had increased, while a decline was reported by 41%.
Government policy towards the manufacturing sector, the power of retailers and the consequent inability to pass on price increases were among the most pressing concerns of the 100 senior managers and directors interviewed.
Major criticisms of the 93 % of respondents that stated the government was not doing enough for industry cited a lack of understanding about the real impact of the ever increasing rules, regulations, taxes, costs and bureaucracy emanating both from the government and the EU.
Challenging the government Ian Dent, chief executive, Packaging Federation, said:
“If packaging manufacture is to remain a viable part of the UK economy, it is vital that some constructive dialogue takes place with the DTI on the issues identified in this survey and the earlier competitiveness study on the sector. We need a strong champion within the DTI to work with the industry, not against it, as we so often feel is the case.”
A further 59% of respondents’ felt that the UK was not a good place to invest; once again pointing to the lack of government support for manufacturing and high labour costs as the major deterrents.
Dominic Cakebread, managing director, Landell Mills Consulting, stated: “The results of our 2003 survey were not entirely a surprise, confirming the findings of much of the work we have carried out for The Packaging Federation over the last few years. There are many severe and diverse pressures on the sector at present and the survey results point to the longer-term need for UK packaging suppliers to focus more upon investment in r&d, getting closer to and improving their services to their UK clients and expanding overseas to offset the competition in their home market.”
The strength of sterling against the Euro was considered to have been detrimental to business by 52% of the sample, but answers were not clear cut on he question of when the UK should adopt the currency. There was an almost equal split between those that felt Britain should join immediately (31%) and those said it should never join. However, this was offset by the 22% that felt that joining within a time span of three years would be beneficial.