• Blog
  • 5 Business Challenges faced by UK Manufacturers in 2022

5 Business Challenges faced by UK Manufacturers in 2022

19 Jan, 2022

For most UK manufacturers, 2021 was a test of resilience and agility. The added disruptive factors of COVID, including the supply chain crisis, have led many manufacturers to review their strategies and put plans in place to avoid these challenges becoming critical issues which will hinder their future growth and ultimately have a massive impact on their survival.

Happily, the UK economy is on track currently to be the fastest-growing economy in the G7. However, there are 5 areas of risk to note which need to be closely managed in order to ensure that manufacturers capitalise on, and contribute to, economic growth this year.

Inflation & Interest Rates

Driven primarily by increasing energy costs, the UK Government has announced that inflation could hit 5% this year.

There will be an unprecedented demand for working capital during 2022 with rising cost of supplies and utilities, the tightening of the labour market and the consequential rise in wages.

Of course, increased inflation will always force manufacturers to closely examine their internal pricing models and decide whether they can maintain their margins with higher input prices, or select to pass on the cost increases to their consumers.

There is also, more than likely, a rate hike on the horizon, so the cost of borrowing will be set to increase. If you are a manufacturer who is looking to loan money, you will be wise to access a fixed-term, fixed rate loan to prevent exposure to an unsettled lending market.


Skilled manufacturing workers are in short supply. There is an increasing and challenging task of retaining and recruiting skilled staff, as the pandemic has radically changed the working environment. It’s fostered new challenges and responsibilities for business owners to deal with. Workers are becoming increasingly transient, and the era of cheap labour is virtually non-existent. A tightening of the labour market has put an upward pressure on wages, which, coupled with the lack of skilled labour due to the consequences of Brexit, is having a negative impact on companies working capital.

Going into 2022, manufacturers need to balance the requirement to attract skilled staff through financial incentives, whilst ensuring they have enough working capital to continue with their business operations.


Accounting for more than 60% of the UK’s total carbon emissions, manufacturing is an energy-intensive industry which plays a vital role in the country’s efforts to reach net zero.

During the COP26 Conference, the United Nations Framework Convention on Climate Change, over 50% of the UK’s largest manufacturers committed to moving to net-zero by 2050, and two thirds of manufacturing companies have already committed to net-zero. The predicament is that many companies have spent the last year making little progress, instead focusing their efforts on stabilising their operations. The last 18 months have seen gin companies produce hand sanitiser, the Royal Mint adding plastic visors to its production line, and fashion brands manufacturing scrubs for the NHS. The response has been unbelievable, and demonstrates that the sector has an exceptional ability to adapt and respond.


Manufacturers have warned that Brexit will add to the costs facing UK manufacturers this year. Concerns that delays at customs, the additional costs of meeting separate regulatory regimes in the UK and the EU, and reduced access to migrant workers are top concerns.


Major retailers’ stock levels have been at their lowest since 1983, following the recent crippling supply chain crisis.

So the essential requirement for manufacturing businesses to digitalise has never been as crucial. Digital transformation can help drive growth, and support manufacturers by lowering transaction costs and those costs associated with transport and border restrictions. It also supports innovation, and allows manufacturers to analyse their data in order to improve their operations and strategic decisions.

Such a move brings a wealth of opportunities to drive productivity improvements, cost-savings, market differentiation, customer insights and new revenue streams. The challenge for manufacturing businesses lies in how best to harness the disruptive force of these technologies and translate it into competitive advantage.

When it comes to industry-specific manufacturing software, not all solutions are created equal. Creating resilience for tomorrow, while responding to today’s demands, requires businesses to adopt platforms and services that are fast, flexible and can scale with the needs of their operation.

These are five modern technology solutions already helping manufacturers to work smarter, more collaboratively and more efficiently.


Dive into our knowledge and best-practices

Contact us

By using this form you agree to the storage and processing of the data you provide, as indicated in our privacy policy. You can unsubscribe from sent messages at any time. Please review our privacy policy for more information on how to unsubscribe, our privacy practices and how we are committed to protecting and respecting your privacy.