After Covid-19: Industrial & Manufacturing

In the first of a series of sector-specific blogs, we look at the impact of Covid-19 on the industrial & manufacturing sector, and what the future might hold for businesses operating in this sector.


The industrial and manufacturing sector employs 2.5m people across the UK and – pre-pandemic – was heavily reliant on global supply chains. PWC suggest that the Covid-19 crisis ‘will prompt greater consideration for dual – and near – sourcing, with a focus on localised supply chains that draw on suppliers traditionally tied to other industry sectors.’ This certainly seems like a sensible move that most organisations in this sector should consider, to mitigate the impact of further outbreaks of Covid-19 in other parts of the world on their operations. Even with a vaccine on the horizon, our level of unpreparedness for the Covid-19 crisis has underlined how quickly a pandemic can disrupt our lives; many organisations may choose to localise their supply chains not just as a response to Covid-19 but in anticipation of any future global pandemic.


In terms of day-to-day operations, industrial and manufacturing businesses have the added challenge that on average only 22% of workers in these types of businesses are able to work from home. Workers who need to work on site are also more likely to come into close contact with up to 20 other people on a daily basis, than those in other industries, and therefore until a vaccine is universally available, the risk of Covid-19 transmission, and therefore interruptions to workflow is greater for these type of businesses. The combined impact of this may well be an increased march towards automation of jobs, as organisations seek to ensure that productivity remains stable.


On a positive note, the industrial and manufacturing sector has been one of those to show the power and profit of diversification. Many organisations switched their operations to manufacture medical equipment or PPE. Having been through that process, these organisation now have the understanding of how agile they can be in adapting their processes, which will help them to diversify their income streams in future. This opens up the opportunity to evaluate all aspects of the business, to streamline and innovate, to be ready for the end of this pandemic, and prepared for any future crisis.


Setting Covid-19 (and Brexit) aside, one of the most pressing concerns for the industrial and manufacturing sector is climate change and in particular emissions targets. One of the benefits of the pandemic has been a resultant change in air quality, and it would be a shame to lose this benefit by going back to business as usual once the pandemic has passed. Under normal circumstances it would be extremely challenging for industrial and manufacturing businesses to find the space in their schedules to turn over their operations to greener technologies, but some businesses might find that with lower demand for their products at present, it is easier to make these changes to lower their emissions.


The Covid-19 crisis has been challenging for the industrial and manufacturing sector, but has also identified new opportunities for diversification, automation, and climate protection. If you would like help and support with developing your business, speak to your accountant.