One year since leaving the EU, two-thirds of manufacturing companies have reported that Brexit has moderately or significantly hampered their business, however optimism for growth has risen.

The 2022 Make UK/PwC Senior Executive survey also reported that over half, 56% fear that their business will be further impacted this year from customs delays due to import checks and changes to product labelling.

The survey of 228 companies found that UK manufacturers faced a large scale of uncertainty over the last 12 months with optimism also being tampered with escalating inflationary pressures, the supply chain shortage, and access to, as well as retaining, talent and key skills.

Even with these anxieties, nearly three quarters, 73% believe that conditions for the sector will improve in 2022 with the same number believing that the opportunities for their business outweigh the risks as 63% believe that the UK is a competitive location for manufacturing.

To counteract the challenges highlighted in the survey, 35% of manufacturers are planning to change to UK rather than international suppliers, while almost a third, 31% said they were planning to relocate some or, more of, their production back to the UK.

The survey also shows the increasing drive towards ‘net zero’ for manufacturers with half of the companies, 49%, stating that they planned to invest in green technologies or energy efficiency measures in 2022 with a third saying that its investment in the green sector has already increased.

Cara Haffey, industrial manufacturing and automotive leader, PwC UK said: ‘Despite facing an unprecedented combination of continued Covid-19 pressures, cost inflation, and supply chain issues, manufacturers are responding with an impressive amount of agility and resilience, which will stand them in good stead for the year ahead.

‘They have learned valuable lessons about their supply chain vulnerabilities and the resilience needed to respond to unforeseen international or domestic risks.

‘We are particularly pleased by the breadth of net zero ambitions reflected in the report. Across the UK we’re seeing an increasing number of businesses underpin their environmental, social, and governance strategies with practical applications to decarbonise their operations and ambitions to build out their green skill base through the recruitment of ‘green’ jobs.’

As seen in other industries, skills and talent were also seen as a risk factor for the industry with almost two thirds of companies, 58% struggling with access to labour while nine in 10 companies were not just worried about losing skilled workers from their business but from the sector entirely.

Despite the current financial challenges almost half, 45%, of companies said they still planned to invest in apprenticeships in 2022.

Stephen Phipson, chief executive, MakeUK said: ‘To build on this we now need to see a government fully committed to supporting the sector at home and overseas. This requires more than a Plan for Growth but a broader industrial strategy that sets out a long term vision for the economy and how we are going to achieve consistent economic growth across the whole country.’