In an age of uncertainty, manufacturers are adapting to a multi-polar world, focusing on customer – a look at the 19th Annual CEO Survey

12 February 2016

UK manufacturing growth increased last month driven by the domestic market – exports however, fell. So it’s timely that the Industrial Manufacturing industry findings from PwC’s 19th Annual Global CEO Survey have just been released.  They reveal that worries about the global economy are putting pressure on short-term confidence levels. But they also show that looking further out, CEOS see a brighter picture.  Eighty-two percent of Industrial Manufacturing CEOs identify geopolitical uncertainty as the principal threat to growth. This was higher than the results for the Global CEO survey as a whole (76%) That’s followed by exchange rate volatility and availability of key skills.


Overall, our Global CEO survey shows that business confidence amongst IM companies is lower than it’s been for the previous two years. Just 24 percent of CEOs in this industry expect to see any improvement in global economic growth over the next 12 months. Looking further out, however, these same companies are more optimistic, with 46 percent of CEOs feeling very confident in their own prospects for revenue growth over the next three years (that’s the highest since 2010).

It’s a familiar picture for UK CEOs in this sector – in terms of short-term uncertainties and longer-term outlook. Weak global demand, volatile commodity prices, a strong currency and ongoing under-investment in the sector continue to present difficulties. Manufacturing lags its pre-recession peak throughout the G7 economies[1]. But it’s important to remember that Britain continues to rank as one of the 10 biggest manufacturing nations in the world, with particular resurgence right now in automotive, and ongoing leadership in aerospace.

It’s no surprise that ongoing developments – from slowing growth in China and EU cohesion to the threat of escalating conflict in the Middle East – are taking their toll on confidence across the global IM sector. But we believe there’s a more fundamental shift going on, from a globalized world to one with many dimensions of power, growth, and threat – what we call multi-polar.

Our survey also shows that Industrial manufacturing companies are aware of the need to address changing customer and stakeholder expectations. Although nearly three quarters of CEOs in these companies believe their customers make decisions based on cost, function and convenience, 23 percent believe they’re already more interested in seeking out companies that address wider stakeholder needs. That jumps to 40 percent when CEOs consider  customer priorities five years out. Along with customers, supply chain partners have a high impact on IM company strategies. And that’s increasing too. All the indicators point to much more emphasis on minimising the social and environmental impacts of supply chain partners from now on.

There’s much greater awareness of the need for technology-led innovation to help IM companies meet evolving stakeholder expectations – whether that’s through improving communication across the supply chain, better understanding customer demand, or transforming how core risks are defined and managed. It’s a sentiment echoed by Canan Özsoy, GE Turkey CEO and one of our interviewees: “Right now, we do not call ourselves an industrial company anymore, but we call ourselves a digital industrial company because the data, the way the internet has changed our lives…shows us a very different future.”

In my next post, I’ll be delving deeper into the key skills findings and how they’ve changed over the years and addressing what UK manufacturers can do to attract the right talent - now and in the future.


Cara Haffey | Partner, UK Industrial Manufacturing leader
Profile | Email | +44 (0)14 1355 4125


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