UK manufacturers could inject an additional £2.56bn into the UK economy, cut energy consumption by nearly a third (31.6%) and boost their energy resilience by increasing investment in energy technology over the course of the next decade, finds a new report by Barclays.

The research shows a growing concern about the availability, reliability and cost of energy with nearly a third of South West manufacturers surveyed (29%) saying that energy supply is more of a concern to their business now than at the start of 2016. This compares to 27% at the national level.

These concerns have come to the fore as manufacturers feel squeezed by increases in the price of other raw materials, greater competitive pressure in the sector, and concern over the eventual impact of the UK leaving the European Union.

The Barclays Corporate Banking Powering On: Energy Resilience in UK Manufacturing report examines current attitudes of UK manufacturers towards energy supply and management and models how manufacturers could reduce their energy demand.

Lee Everson, head of Large Corporate Banking for Barclays in South West and South Wales, (pictured) said: “Energy resilience and costs are vital considerations for manufacturers across the South West and we know manufacturers are taking steps to improve their energy resilience, from investing in energy efficiency to self-generation and partnering with resource recovery parks.

“Our research shows that working to increase this investment will not only help shield against future changes to the energy supply, but will also benefit the wider economy by making the sector more competitive through reduced costs and increased productivity.”

Longer term, South West manufacturers are concerned that energy shortages will occur, with 49% expecting these in the next ten years. More than half of the sector (53%) believes that they are vulnerable to energy shortages, arguing that current preparations are likely to be insufficient, compared to 63% at a national level.

The Barclays research reveals that if all manufacturers became as energy efficient as the leaders in the sector, this could create an industry worth £160bn to the wider economy by 2025.

This represents an increase of 5.1% in value terms compared to 2015, and a £306m increase on the projected value of the manufacturing sector if it were to remain on its current trajectory, without improvement in energy efficiency.

This extra economic output will be achieved by the sector cutting costs and improving its international competitive position, but only if the sector can develop the leadership commitment and resources required.