Manufacturing, Transport and Logistics Outlook 2024

2024 Outlook: Manufacturing, Transport and Logistics

Exploring new routes in 2024.

See the big picture

Based on conversation I’ve had with UK manufacturers, I think that they have demonstrated strength and ingenuity when dealing with supply chain vulnerabilities. These qualities will serve them well as they tackle the skills shortage and work to cut emissions across their value chains.

Lee Collinson

UK Head of Manufacturing, Transport and Logistics, Barclays Corporate Banking

Winning the battle for skills

There is a general agreement from conversations with our clients in the sector that the labour and skills shortage is one of the most pressing challenges they face and we expect this to continue to impact growth prospects into 2024. This is of course a multi-faceted issue which impacts both the number and the quality of people available with the right skillsets. I expect this may continue to be a particular challenge for manufacturers looking to move more of their sales to a direct-to-consumer model, for example, given the different skillsets that this requires.

As a result, many businesses, particularly in the engineering sector, tell us they are spending considerably more money to attract and retain talent, something I expect they’ll need to keep doing for the foreseeable future. Some of our manufacturing clients have also told us that they’re hopeful of more government support to help them tackle the skills shortage, for example by making the apprenticeship levy more flexible.

Shoring up the supply chain

From my experience, the current geopolitical situation could continue to fuel supply chain uncertainty as we head into 2024. Already this year businesses are telling us that they are having to deal with the delays being caused by the disruption to shipping through the Red Sea with traffic being diverted around Africa, potentially adding to transit times.

Businesses we work with across the sector have adapted their supply chains in recent years to overcome the various challenges and vulnerabilities. Many have told us that they have re-shored or near-shored their supply chains, and are also seeing an increasing trend toward ‘friend-shoring’ – moving supply chains to countries regarded as politically secure and friendly to the UK. We’re also seeing more and more businesses move from single-sourcing to dual- or even multi-sourcing from various locations around the world. All these changes – and potentially others – may play a key role throughout 2024 as businesses work to secure and strengthen their supply chains.

89% of UK manufacturers we surveyed said they have a clear strategy in place to measure and reduce their Scope 3 emissions.

Lee Collinson

UK Head of Manufacturing, Transport and Logistics, Barclays Corporate Banking

Finding a path to net zero

I’m pleased to say that our latest research1 shows that the sector as a whole appears to be making progress in putting formal carbon emission reduction strategies in place and helping to decarbonise their supply chains. There is some recognition that this is not only the right thing to do but makes good business sense in terms of meeting customers’ changing expectations and preparing for potentially tighter regulation in the future. Many of the businesses we talk to are taking action, for example by using more recycled materials in packaging, reducing their use of air freight and using more sustainable materials in the development of new products, and changing suppliers where necessary to ensure their downstream activity comply with their Scope 3 emissions strategy.

These requirements of course have various knock-on effects, and businesses will need to ensure they have the necessary specialist resources in place to support their net zero journey in the year ahead. Success may require a shift in mindset across the business.

Key takeaways

Get creative to fill the skills gap

The onus is on businesses to partner with schools, colleges and universities to create appropriate courses and apprenticeships, to inspire young people about the manufacturing world.

Put business continuity on the agenda

When making plans take account of supply chain vulnerabilities put appropriate contingencies in place.

Get everyone on board for ESG

Everyone needs to be engaged and buy into why it’s important, what the strategy is, and how it’s going to be implemented.

Keeping fraud front of mind

Fraudsters are as active as ever across the manufacturing, transport and logistics sector, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.

Remember, Barclays will never:

Ask you to make payments or move money to a ‘safe’ account

Call and ask you to provide or enter your PIN or use your biometric device, for any reason

Take control of your computer.

Get in touch

Request a call back from our team and see how we can help you develop strategies for managing your business.

Under £6.5million (please visit https://www.barclays.co.uk/business-banking/‡ or call 0800 515 462)

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