Crucial Updates on Market Trends and Regulatory Impacts for 2024

Following on from our Market Update Newsletter last year, our MD Nick Darrall wanted to take this opportunity to provide you with a 2024 update on 5 key impacts the current economic climate & ever-evolving regulatory environment may have on your future projects:

Price Volatility

As highlighted in our previous update, prices continue to rise due to material shortages, high utility prices, and increased shipping costs. Manufacturers are still adjusting prices quarterly rather than annually.

For instance, stainless steel prices saw significant increases throughout 2023. While there was a slight dip in early 2024 due to a weakening global economy, prices are expected to stabilise and potentially rise again as the economy improves later this year.

We are uniquely positioned as a platform-independent solution provider to help you: we are in constant discussions with our platform partners so we can be agile and adapt fluidly around these market forces.

Net Zero & Energy Price Stabilisation

Mitsubishi Electric recently surveyed 200 senior UK manufacturing decision-makers on boosting sector resilience to energy pressures.

The report, Energy on an Industrial Scale, showed the following responses:

While 85% prioritise net-zero as a key business goal, and 70% are required to report scope 1/2/3 emissions for tenders, only 35% are implementing net-zero programmes, and …

Whilst 91% are concerned about energy price security, and 85% are worried about grid resilience, only 24% have full on-site energy management systems and just 27% employ dedicated energy managers.

An increasingly important discussion with clients revolves around the transition to net zero and the energy cost savings we can bring to your automation projects for sustained cost reduction and reduced energy cost volatility as a result.

Price data from a UK Steel report shows that UK producers faced average wholesale prices of almost ￡66 per megawatt hour (MWh) in the past three months compared to France’s ￡27/MWh and Spain’s ￡28/MWh.

Manufacturing Economic Outlook

The latest Make UK survey makes for largely positive reading. Make UK predict manufacturing will grow by 1.2% in 2024, beating GDP growth.

However, this is tempered by the continuing shortage of skilled workers – this is a constant conversation we have with clients, which we work with them on to overcome.

The General Election Result

The general election last week will no doubt lead to changes to regulatory frameworks, trade policies, we'll hopefully see economic initiatives that could affect supply chains and cost structures.

Labour said in its manifesto that it would allow employers to spend up to 50% of their apprenticeship levy on accredited non-apprenticeship training under a new growth and skills levy... we await news of this with interest.

Certainly we are keen to see what their plans to boost UK Growth levels and tackle the skills shortage will be.

The NIS2 Directive: how it impacts you

The Network and Information Security Directive (NIS2 Directive), which comes into force in October 2024, is an EU regulation aimed at enhancing cybersecurity across various sectors, including manufacturing. This updated directive replaces the original NIS Directive (2016) and introduces stricter requirements to ensure a higher level of cybersecurity resilience among essential and important entities.

If you are a non-EU member country, that does business within the EU, you are not bound by this EU legislation.

However, non-EU member states doing business with any EU member countries will need to be compliant and should be prepared to implement similar comprehensive and resource-consuming measures.

The impact of this Directive includes:

• Broader Scope and Increased Coverage - NIS2 expands the range of sectors covered, including more types of manufacturing companies, especially those critical to supply chains. Both large and medium-sized manufacturers are now required to comply with the directive.
• Enhanced Cybersecurity Measures - Companies must implement more robust cybersecurity measures, including risk management practices and incident response strategies. Regular security assessments and audits are mandated to ensure compliance.
• Incident Reporting Requirements - Manufacturing companies are required to report significant cybersecurity incidents to the relevant national authorities within 24 hours of detection. Detailed reports, including the impact and response actions, must be submitted within 72 hours.
• Supply Chain Security - The directive emphasises securing the entire supply chain, requiring manufacturers to ensure their suppliers and service providers also adhere to strict cybersecurity standards.
• Increased Penalties - Non-compliance with NIS2 can result in substantial fines and sanctions, encouraging companies to prioritise cybersecurity investments.
• Collaboration and Information Sharing - Manufacturers are encouraged to participate in information-sharing networks to enhance collective cybersecurity knowledge and defence mechanisms.

In conclusion, the introduction of the NIS2 directive significantly raises the cybersecurity bar for manufacturing companies. By expanding its scope, enforcing stricter measures, and emphasising supply chain security, NIS2 aims to create a more resilient and secure digital landscape.

If this is on your radar, or isn’t yet on your radar but should be, give us a call and we can help you rise to meet this new regulation challenge.

How can we help?

At iconsys, we pride ourselves on forward-thinking and are well-positioned to navigate alternative routes to achieve project goals while minimising impacts on your business. Our extensive supplier base gives us a unique and strong position to assist you.

If we can be of any assistance to ensure your projects are achieved in a timely manner, please let me know or contact your usual iconsys representative.

Until next time!

Nick Darrall, Managing Director, iconsys