- Respondents to ADS survey report an improved business outlook
- 80% of respondents expect their turnover to increase in 2024 compared
to 2023 - Three quarters of surveyed members plan to increase investment in 2024
ADS’ midpoint 2024 Industry Outlook survey reveals a buoyant and positive mood among the aerospace, defence, security and space industries.
When asked about their expectations for their business turnover, 80% of respondents to the survey expect their turnover to increase in 2024 compared to 2023. 10% expect turnover to remain the same, while the remainder are concerned about a decrease.
This is compared to a similar in year check in by ADS in 2023, where just 60% of respondents reported positive expectations of business turnover increasing.
Aimie Stone, Chief Economist at ADS Group said:
‘Business confidence and sentiment at the mid-point of 2024 has revealed a positive outlook, this aligns to what we hear when speaking to members who have plenty of demand for their products and services.’
Three quarters of surveyed members plan to increase investment
ADS asked businesses about their intentions for 2024 compared to 2023, revealing that almost three quarters (72%) of respondents intend to increase investment.
Comparatively, in 2023, respondents showed reduced appetite for in-year investment, at just 50% of respondents planning an increase.
As part of the 2024 mid-year survey, ADS asked where respondents had already made or were planning to make their investments. Investment in recruitment and investment in digital technology / IT and Cyber security ranked the highest, each securing 25% of responses.
Political uncertainty detracts from business confidence
In light of increasing geopolitical and domestic uncertainty including widespread election periods, the largest detractor of business confidence highlighted by ADS member confidence is regulation and legal requirements.
‘In direct response to this, and to offer stability to decision makers, ADS reiterates its call to the new government to prioritise a new Industrial Strategy, developed in conjunction with Industry through an Industry Strategy Council, which we saw announced in the King’s Speech.’
Other areas of business concern highlighted by this survey are:
- Geopolitical uncertainty
- Cash flow and access to finance
- Skills shortages
- Availability and cost of raw materials
Members were asked to rank these themes by how much they believe they will impact their business over the remainder of the year with all five themes scoring negatively. Using the Net Promoter Score®, Regulations and Legal requirements were rated at -60, closely followed by Geopolitical issues and the conflict in Ukraine which scored -56.
Cashflow and access to finance scored -52 at the 2024 midpoint review, ADS continue to focus significant efforts to understand the experiences of members, and we know that cashflow and capacity constraints are two key issues which are affecting industries growth plans. The second half of the year will see ADS ramp up engagement with the new HMT team and financial institutions, including banks, investors and insurers, to continue to build a coherent narrative and improve the knowledge around our sectors and likewise offer support to industry on ways of working.
Staff and Skills shortages scored -22 in the survey, which is the best score, faring slightly better than the availability and cost of raw materials and parts which scored -28. Given that we know recruitment is an area our members are planning to invest in throughout 2024, it is reasonable to see that the action they are taking is alleviating their concerns around business impacts to a degree. Although most respondents still report negative scores regarding skills and workforce shortages compared to those who scored passively. Discussions across the ADS membership indicate that a desire to increase headcount is being met with increased wage competition and ongoing skills shortages. The ability for firms to grow their in-house skills base is vital and reflected in the record apprentice for 2023 of 23,000 apprentices across our sectors.
About the survey:
This Industry Outlook survey is instrumental in helping to highlight the issues that ADS needs to represent to stakeholders and policy makers and the new Government.
At the midpoint of 2024, ADS surveyed our member companies through the ADS Industrial Outlook to get a temperature check on current trading conditions and a view on the outlook for the year ahead. This survey was open for three weeks and secured 50 responses across the membership. The majority of respondents (83%) were manufacturing or technology businesses.
For further details please contact Aimie Stone, Chief Economist,
aimie.stone@adsgroup.org.uk
