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November 23, 2005

UK: Motor industry positive about future prospects

A survey of senior industry executives published today (23 November) shows the UK motor industry to be positive despite fears that new legislation is blighting competitiveness.

A survey of senior industry executives published today (23 November) shows the UK motor industry to be positive despite fears that new legislation is blighting competitiveness.

The SMMT’s third annual survey, called Automotive Manufacturing 2005, states that while productivity is improving and initiatives to address the skills gap are starting to bear fruit, there is an industry call for action to limit the legislative cost burden.

There is also criticism about transport infrastructure and a need for more support from government for international trade.

SMMT president Roger Putnam said: “Our survey shows the strength of feeling about the cost burden of new and sometimes conflicting legislation. This central concern is one reflected across Europe but my hope is that it may subside in years to come.”

The report found that growth is expected by most companies in the next five years. Some 84% of those surveyed said that prospects are good compared to 81% last year and 75% in 2003.

However, 95% of those surveyed said that the burden of legislation has significantly increased costs in the last five years and 93% believe the situation will worsen in the next five.

In particular, respondents are pessimistic about improvements in the UK business environment. While 53% feel it will improve over five years compared to mainland Europe, this figure falls to 30% when compared with the US and just 4% in relation to companies operating in the Asia-Pacific region.

Companies believed the UK transport infrastructure makes it difficult for UK companies to remain competitive according to 78% of those surveyed, with 87% believing it will not improve in the next five years.
 
Meanwhile, just 9% of respondents felt that government support for international business development has improved over the last year.

On skills, 48% of those surveyed said it was hard to recruit appropriately skilled employees. However, this is an improvement from 65% last year.

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