UK Manufacturing: What You Need To Know

uk manufacturing

UK Manufacturing has continued its upward trend and toward the end of 2017, was named the eighth largest manufacturer by output in the world. This came less than one year after claiming ninth spot. Reports from EEF and Santander shows the nation’s annual output is worth nearly $250bn. If this current growth continues, UK Manufacturing could be in the top five as early as 2020.

Much has been said about the effect Brexit could pose but manufacturing in Britain continues to grow. In fact, it will further increase Britain’s link to the world where they currently generate 44% of total UK exports. This article highlights the state and importance of UK manufacturing. Some of the data were collected from the EEF and Department for Business, Energy & Industrial Strategy (BEIS).

The Importance of UK’s Manufacturing Sector

The manufacturing sector is essential as a future source of income, undertaking 70% of total R&D by Britain’s businesses. The largest individual sector is food and beverages (16%), while chemicals, pharmaceuticals and transport account for 14% output. These two sectors also head up the manufacturing innovation league table, with ONS figures indicating that pharmaceuticals account for 34.4% of UK innovation, and transport 33%.

In terms of manufacturing output, the North West remains the largest producing more than £24bn. In addition, West Midlands produce £17.5bn and East Midlands £15.9bn, with their strengths in aerospace and the automotive sector.

General employment figures are equally impressive with 2.6 million people working within UK manufacturing. Of course, there is still a skills shortage in the UK as many companies struggle to recruit skilled workers. Although it may be a concern, the government has been working closely with manufacturers since 2016 to increase productivity. They had already invested £6.9bn in the UK’s research infrastructure.

According to the BEIS, they’ve been supporting employers across the country to address skills challenges. It involves reinforcing their position on skills training and higher education to ensure every young person is equipped with the skills employers currently need and in the future. The apprenticeship levy is one such example of how a forward-thinking approach has put employers back in the driver’s seat.

There is more good news in the form of comparable pay rates. Wages are higher than other sectors with highly paid and highly skilled jobs. Manufacturers contribute to the increased standard of living with the average pay in the sector growing from £31,489 to £32,047, more than the economy standard.

UK Manufacturing Facts 

  • Driven by a global rise in demand, and partly due to a weaker sterling, manufactured exports have increased.
  • EU markets still dominate exports, accounting for 48% of manufactured exports as of Q2 2017.
  • The public perception of UK manufacturing is ambitious. 70% of UK adults believe Britain should aim to be one of the top five manufacturing nations.
  • Manufacturers have started to make the transition to new processes striving for greater productivity and functionality. Technological advancements in the last few years mean the industry is getting ready for the Fourth Industrial Revolution (4IR). It may already be closer than we think.

Despite concerns over Brexit, many believe it will actually increase profitability within the manufacturing sector. As it stands, EU membership does indeed benefit manufacturing with tariff and non-tariff barrier rates estimated at about 20%. Removing these tariffs mean manufactures in the UK’s domestic market could, theoretically, drop their prices by 20%. As a result, consumers will directly benefit, competition will increase and productivity pushed higher across the economy.

In closing, Chief economist of EEF, Lee Hopley explained, “With government facing lots of major policy decisions on everything from our future trading relationship with Europe and the rest of the world to the detail of a long-term Industrial Strategy, it is vital that they have the right industry facts at their fingertips”.

PRV Engineering manufactures for a range of industries including automotive, rail, aerospace, construction and defence. Our expertise extend well beyond cnc machining, waterjet cutting, structural steelwork, busbars and fabrication. Get in touch if you need additional information or assistance with your engineering project.