Britain has become less competitive and less attractive to foreign investors in the wake of soaring energy costs and recent political unrest, the findings of an industry survey released on Monday found.
The percentage of manufacturers who consider Britain a competitive location fell from 63% to 31% a year ago and 43% said Britain had become less attractive to overseas investors according to a survey by Make UK, the main trade body for British manufacturers, and accountants PwC.
The survey of 235 businesses took place from November 1 to November 22, when the debacle of Liz Truss's short-lived government was fresh in people's minds, and 53% of firms said ongoing political instability had damaged business confidence.
This week finance minister Jeremy Hunt will outline plans to dramatically cut energy subsidies for businesses.
Make UK said the plan could lead to an acceleration of job cuts and production already in the pipeline. When the survey was conducted in November, two-thirds of manufacturers expected to reduce the number of employees or reduce production due to high energy costs.
Manufacturers in Britain have struggled of late, with the closely watched S&P Global business survey indicating that they suffered a worse decline in December than other Group of Seven countries.
"2023 will be a very challenging year for manufacturers with a strong combination of factors testing their resolve," Stephen Phipson, chief executive of Make UK.
"Continued supply chain disruptions, access to labor and high transportation costs that show no signs of abating could add to the growing economic and political uncertainty in their key markets."
Phipson said there was a big risk that British manufacturers could be left behind if the government failed to match the generosity of the energy bill support program that British rivals are providing.
Government plans to cut energy subsidies for businesses will see support costs fall by 85% in the next financial year, capping costs at 5 billion pounds ($6 billion) according to published reports.
