UK Metals Council: Upcoming report highlights optimism in the metals sector despite global trade, energy, and labour challenges

A forthcoming report to be unveiled next week highlights that the primary challenges confronting the UK metals sector revolve around escalating energy costs, the consequences of post-EU life, and persistent labour shortages.

Approximately 25 per cent of companies surveyed in the UK Metals Council's 2023-24 State of the Metals Industry report acknowledged changing their supply chain strategies or exploring alternative sourcing options. Following Brexit, about 30 per cent of respondents expressed a desire for more government assistance in addressing trade barriers and customs procedures.

However, only 22 per cent of manufacturers seek enhanced energy supply contracts to reduce costs. In comparison, 31 per cent of businesses claim to possess an efficient recruitment strategy to address the widely acknowledged labour shortages.

The report, set to be officially unveiled during the opening address at the UK Metal Expo in Birmingham on September 13^th, contains favourable sentiments. Even in the face of widespread challenges, it is noteworthy that 70 per cent of respondents express optimism or high optimism regarding future business prospects. This underscores the sector's resilience and its capacity for innovation.

Rachel Eade MBE, the Chairman of the UK Metals Council, said, "We touch metals every day, whether that is in our homes, in the cars, planes and trains we travel in, the medical devices we rely on, as well as tools and machinery used for their production."

“Importantly, it is now recognised that metals can be infinitely and readily recycled into new parts, something that cannot be said for many other materials in modern life – we need to value metals more as we move to a net zero economy.

“Foundation industries will continue to play a critical role in the way we all live, and this vital sector needs a voice to ensure that the Government understands the journey we are on.”

“This is why we came up with the State of the Metals Industry in the UK Report, a unique opportunity for us to canvas the views of primes, metal producers and those in the downward supply chain. The issues they are facing span from supply chain disruption because of Brexit to availability of raw materials and how they can mitigate the cost of energy – a key issue when you consider levels of consumption in our industry. Skills and the ability to get new people into our sector is also a challenge that is holding many of them back as they look to support the UK’s desire to move towards Net Zero. We’ll be highlighting this to the Government at the UK Metals Expo next week.”

Over the past year and a half, Phil Rawnson, the Managing Director of MRT Castings located in Andover, has witnessed a threefold increase in energy prices. MRT Castings, with its annual sales of £8.5 million, relies heavily on exports, accounting for over 60 per cent of its revenue. The substantial surge in energy costs poses a significant challenge to their international trade operations, particularly when other countries are not burdened by similarly exorbitant price hikes and delivery expenses.

Phil Rawnson said, “We can’t pass all the increases on to our customers, so there is little doubt our global competitiveness has been hit. Whilst we continually focus on becoming more energy efficient as we drive towards Net Zero, we could certainly do with a more simplified support offer from the Government.”

“At the last count, there are 26 different support packages to help them move towards decarbonisation, but as an SME, we don’t have the time or resources to uncover which corner of Whitehall they’re buried in. Bureaucracy is too heavy and costly, and this is a barrier for firms to tap into the financial assistance out there.”

Brexit has posed significant challenges for MRT Castings, a company that invested substantially in one of the UK's most modern foundries in 2020. Previously, shipments to one of the company's major clients in Ireland would arrive in less than 24 hours. However, due to the extended and expensive customs procedures following Brexit, the journey now spans three to five days.

Phil added, “Our sector is extremely resilient, and we can achieve amazing things when we work together. Just look at what we did during the Covid-pandemic when we trebled our output – with the help of our supply chain - to support the ventilator effort that saved hundreds of lives.”

“We don’t want handouts, just a level playing field.”