Contractor Confidence in the UK Engineering and Manufacturing Sector: Insights and Future Outlook

The UK engineering and manufacturing sector continues to be a vital engine for the nation's economy, with contractors providing the specialized skills and flexibility needed to meet growing demands. As market dynamics shift, contractors are keenly aware of both the opportunities and challenges ahead. Insights from the 2024 Contractor Census, produced by Sapphire Contracting, a payroll specialist trusted by thousands of contractors across the UK, offer a comprehensive view of contractor perspectives, shedding light on how they navigate the evolving landscape and what the future holds.

Contractor Confidence in the Market

According to the 2024 Contractor Census, confidence among contractors in the engineering and manufacturing sectors remains robust. A significant 70% of contractors rated their confidence in the job market at 7/10 or higher, with 25% of those in the engineering and construction sectors giving a full confidence score of 10/10. This optimism is largely driven by consistent demand for skilled professionals in sectors critical to the UK’s infrastructure and industrial growth.

Despite broader economic challenges like inflation and the cost-of-living crisis, contractors in these sectors maintain a positive outlook. The steady demand for engineering and manufacturing expertise, particularly in the construction of private housing and commercial properties, suggests continued growth.

Key Priorities for Contractors

The 2024 Contractor Census also reveals important insights into what contractors prioritize when selecting roles, providing essential information for recruiters and employers:

1. Pay Rate: Competitive pay continues to be the number one priority for contractors, with 87% of respondents citing it as a key factor. As economic pressures mount, securing the best possible rates has become even more critical for contractors.

2. Location and Willingness to Travel: Most contractors are unwilling to travel long distances for work. Only 27% of respondents were comfortable with traveling more than 50 miles, while the majority (47%) prefer travel distances between 10 and 50 miles. This preference highlights the growing trend of hybrid and remote work, which has reshaped expectations around commuting.

3. Longevity of Assignments: Longer-term contracts are increasingly favored, with 81% of respondents preferring contracts lasting six months or more. The demand for longer-term placements reflects a growing desire for job stability, particularly in an uncertain economic environment.

4. Learning and Development: Contractors are also looking for opportunities to expand their skills. For 24% of respondents, the ability to learn new skills was a key factor when choosing roles, reflecting an interest in career growth and adaptability.

Economic Concerns and Market Challenges

While confidence remains high, contractors are still facing concerns about the broader economic environment. According to the 2024 Contractor Census, 95% of contractors expressed concerns about the current economic landscape, with the cost-of-living crisis topping the list for 40% of respondents. Other significant worries included job security (17%) and slow wage growth (14%).

Contractors are also closely watching potential changes to IR35 regulations. While initial concerns following the Off-Payroll IR35 reforms were significant, many contractors have adapted to the changes, particularly as day rates have increased to offset the impact. However, with possible adjustments under a new government, contractors and recruiters will need to remain agile to respond to any new regulatory challenges.

The Future of the UK Engineering and Manufacturing Contractor Market

Looking to the future, the 2024 Contractor Census suggests that contractors in the engineering and manufacturing sectors can expect gradual improvements in market conditions over the next few years. A stronger economy, improved consumer spending, and renewed investment in and support for the nuclear and defence initiatives, infrastructure and logistics are all expected to drive growth.

Conclusion

The 2024 Contractor Census provides invaluable insights into how contractors view the current market and their prospects for the future. With strong confidence in the job market and a focus on securing competitive pay, longer-term contracts, and opportunities for learning and development, contractors in the UK engineering and manufacturing sectors are well-positioned to thrive despite economic uncertainties.

For recruiters and employers, these insights offer clear guidance on how to attract and retain top talent in a competitive market. By aligning recruitment strategies with contractor preferences and staying agile in the face of regulatory changes, companies can ensure they meet the evolving needs of the UK’s highly skilled contractor workforce.