The UK Economy will contract in 2020 and recovery could take three years
The latest quarterly forecast from the EY Item Club projects UK GDP to contract by 13% in Q2 2020 and 6.8% for 2020 overall. Whilst a recovery could commence in Q3-2020 they suggest that it will take until 2023 for the economy to return to its Q4-2019 size.
Consumer confidence and spending will be significantly impacted with reduced incomes and uncertainties over job security, resulting in an unpredictable recovery path and possibly wildly fluctuating buying behaviours.
In addition, we can expect overseas markets to contract, adversely impacting UK exports, and overseas supply chains to be disrupted, which will in turn impact UK manufacturing.
How can UK businesses respond positively to these challenges?
It is very likely that UK businesses will need to review their supply chains, pivoting towards suppliers offering shorter lead-times and capable of reacting quickly to fluctuating demand patterns.
The question then is how can businesses manage the demand for shorter lead-times and rapid responses from their customers?
It is expected that some UK businesses will move more of their supply chain onshore, and we can expect UK Government incentives to encourage this trend and help rebuild the UK manufacturing base.
However, more fundamental change will also be required to enable businesses to respond sustainably to these challenges. New business processes and supply chain practices will be required to enable a rapid recovery, with those companies that adapt most quickly and effectively being the eventual winners. Many such companies are turning to Additive Manufacturing (AM) as one of the key enabling manufacturing technologies as a result.
The team at 3D Consultancy team can help you with all of the following challenges:
- Laying down new tooling with UK based suppliers
- Changing procurement parameters to reduce batch sizes
- Increasing customisation
- Operating with shorter life cycles
- Adopting new manufacturing processes and techniques, such as AM
- Upskilling employees (on new manufacturing processes and techniques); and
- Reviewing the policies, processes and systems with the aim of adopting a more agile business model
The team at 3D Consultancy have extensive experience in the above areas and would be pleased to discuss how we could help you meet the post lockdown challenges facing your business.
Get in touch to discuss how we can help you with your engineering project.