The UK Flash PMI has revealed manufacturing output has grown at the fastest rate in ten months, hitting 52.8 up from January’s 50.1, despite emerging signs of supply chain disruption from the deadly coronavirus outbreak.
However, numerous car makers, including Jaguar Land Rover, face halted production lines in the coming weeks as Chinese factories remain shut, spelling trouble ahead. Stocks of inputs are falling at the quickest rate for over seven years and vendor lead times are lengthening to the greatest extent since March 2019.
This has highlighted the industry’s reliance on key components from the Far East, and how unstable this can be for the economy. Disruptive areas of manufacturing, such as the electrification of cars, hold a large opportunity to enhance the sector. However, UK businesses are currently in need of investment.
Kevin Brundish, CEO of electric vehicle battery manufacturer AGM Batteries, warns that the UK must prioritise the creation of an on-shore, full cycle supply chain if the manufacturing sector is to grow and meet the growing demand for electric vehicles and energy storage. Kevin observes that this would not only stimulate the economy and create jobs, but is more eco-friendly and avoids reliance on unpredictable external factors such as coronavirus.
Kevin comments: “The electrification of vehicles is a crucial factor in achieving the UK’s carbon neutral 2050 targets. In order to meet the unprecedented demand for electric vehicle battery production, the UK will need the equivalent of a staggering eight 15GWh Gigafactories by 2040.”
Kevin continues: “With battery demand for the automotive and energy storage market set to skyrocket, leading British manufacturers like ourselves are hoping for investment in the infrastructure needed to service the industry. The UK’s economy can be boosted with manufacturers who are able to keep up with the huge expansion of this market and create jobs.”
Kevin continues: “Battery supply for the UK manufacturing industry is already struggling to meet demand, and in response, the UK Government should continue to prioritise the creation of on-shore, full cycle battery plants instead of relying on large scale manufacturers abroad. It is costly and increases carbon footprint to have these batteries imported, especially when the UK has the talent and capabilities at home.”
Kevin concludes: “Creating a robust UK supply chain for the production of lithium-ion batteries would strengthen the UK’s car industry, making the country an attractive destination for international car-makers.”