By James White on 16/12/2022
James White, Head of Industrials and Support Services, discusses how companies are navigating challenging conditions in the aftermath of the pandemic and the war in Ukraine
The humanitarian impact of the war in Ukraine has rightly been the focus for the world at large but the economic ramifications of the conflict continue to be profound when it comes to the wider industrials and support services sector.
Nevertheless, companies who have grown used to successfully navigating challenging market conditions in the aftermath of the pandemic battled manfully against these headwinds during 2022.
The difficulty now of course is the outlook for 2023 and how firms communicate with the various stakeholders during a time of intense uncertainty.
While a weaker pound would have helped exporters, those firms who import raw materials will be hoping that GBP’s recent rally following the demise of Liz Truss’ disastrous leadership continues.
Similarly, energy hedging positions will come into sharp relief as the mercury falls, and Russian supplies no doubt suffer yet more mysterious outages.
The latter will of course bring into sharp relief the UK’s plans to ween itself off overseas energy suppliers.
The energy transition is, of course, already happening – the case for change has been made and we are now seeing huge levels of investment into projects such as the HyNet and East Coast hydrogen and CCUS clusters as well as the development of Small Modular Reactors and floating offshore wind schemes.
However, these projects require big commitments from industrial partners across the supply chain, all of whom need to make investment decisions today on projects that won’t come on stream for five or maybe even ten years. Industry players will therefore be waiting with bated breath when it comes to commitments from the Government on these plans in 2023 regardless of the wider spending cuts Jeremy Hunt is looking to put through.
From a communications standpoint, companies will have to juggle a myriad of seemingly contradictory messages.
On the one hand, they will be looking to convey financial stability during a time of intense economic uncertainty to investment audiences but will also be painfully aware of how dangerous it is to be too profitable during a financial downturn and cost of living crisis.
Similarly, firms will have to mollify a unionised workforce while providing comfort to partners and customers that they will not fall prey to the strikes that have crippled large swathes of the country.
And of course, businesses will want to talk up their ability to pass on inflationary cost pressures to customers when presenting to the City, while also not being accused of profiteering.
2022 was a year when, once again, industrials and support services firms had to rise to the challenges presented by a range of external headwinds. 2023 will be the year that they have to juggle some of the communications issues that these challenges have presented.
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