Despite the decline since the 1970s, when manufacturing contributed 25% of UK GDP, the UK is currently the 11th largest manufacturing nation in the world.
Overall, the UK’s industrial sector has increased by 1.4% a year since 1948, according to a recent report from the Office for National Statistics (ONS).
The ONS attributes the sustained growth to a better quality, more skilled workforce; a shift in production from low to high productivity goods; improvements in automation and ICT; increased investment in R&D, and a more integrated global economy.
According to the EEF, UK manufacturing:
- employs 2.6 million people
- contributes 10% of GVA
- accounts for 44% of total exports
- represents 69% of business research and development (R&D)
- provides 15% of business investment
Upcoming UK events from The Manufacturer:
- The Manufacturer MX Awards – Entry Deadline, Thursday 30 June, 2016, Online
- Connect ERP – Thursday July 7, 2016, Manchester
- Webinar: The Fourth Industrial Revolution – Are UK manufacturers embracing it? – Thursday July 7, 2016, Online
- TM Live 2016 – Wednesday 9 – Thursday 10 November 2016, The International Centre Telford
Although the contribution of manufacturing to GDP has declined on paper, many of the services provided to manufacturers which would have once been considered part of manufacturing, such as catering; cleaning; building services, security and so on, are now allocated into different areas of the economy.
However, those contributions are directly reliant on manufacturing for continued business and could actually be considered as a part of manufacturing’s GDP input. As such, many are calling for the true value of manufacturing to be recognised, a move which would see the widely cited figure of 10% of GVA almost doubling to 19%.
Countries by manufacturing output using the most recent known data:
|Rank||Country/Region||(Millions of $US)||Year|
UK Balance of Trade:
Key findings from the Annual Manufacturing Report 2016:
Training & Skills
UK manufacturing needs more skilled workers. The vast majority (84%) of respondents said they have multiple vacancies and more than a fifth (22%) said that they have 10 or more. UK manufacturing is prepared to fill these vacancies from the next generation, with many giving a first job to a school leaver, Further Education (FE) or university graduate.
The overwhelming majority offer apprenticeships, but just over a quarter (26%) do not. The majority of those who currently don’t have apprentices indicated that they plan to offer them in the future.
Economy, Policy & Growth
More than four-fifths (85%) of UK manufacturers are either “very” or “quite optimistic” about the British economy over the coming 12-36 months, which is the second-highest figure recorded since the AMR was launched in 2008.
Slightly more (86%) maintain that they economy generally is being managed “well”, however confidence in government policy is a little lower when it comes to manufacturing in particular at 70%.
This year’s key business focus has been “new product development” (81%), followed by “improved customer relationship management/exploitation of sales opportunities” (71%). That is expected to be reversed in the coming year.
Automation & Productivity
Productivity is a continuing concern for the country as a whole. Automation helps manufacturing to improve productivity and competitiveness and the evidence is that companies are investing in it, at reasonably high levels.
A little under half of respondents said that they are in the process of implementing a major project, and 21% said that they last did so in 2014. This means that just under two-thirds of UK manufacturing businesses committed to major automation projects in the past two years.
A comfortable majority (60%) of respondents said that working conditions and job satisfaction had improved as a result of their most recent automation project. Approaching half (44%) said that jobs had been preserved, and nearly one-fifth (18%) reported that new jobs had been created.
A new section for the AMR 2016, the intention is to gauge the importance of servitization, whether it is spreading, its impact, and growth.
Areas that are at least the germs of servitization, if not core competencies, are currently in the minority, but their levels already look significant. Of these, the strongest is customer support agreements, with 41% mentioning them. Availability contracts are offered by nearly a fifth (17%) of respondents and ‘pay for use’ agreements by almost one in eight (12%).
The lead reason, by far, for offering servitization was identified as “closer relationships with customers”, which was selected by 74%. Approaching half (46%) look for improved profitability through the provision of added-value services, just ahead of the closely-related reason of increased revenue (44%).
Investment in information and communications technology (ICT) continues on an upward trend; 61% said they are spending more this year than last, which is the second-highest level the AMR has ever recorded.
ERP (Enterprise Resource Planning) systems have been given top priority by the highest number of companies this year (25%), followed by Upgrading IT Infrastructure (16%) and Manufacturing Execution Systems (11%).
Of the one-quarter who are actively investigating IoT, the issues driving the investigation were led (in their own words) by ‘connection’ and “connectivity”, followed by “business intelligence”, “tracking” and “control”.
Statistics by sector:
British Aerospace at a glance
- 111,000+ direct jobs // 120,000 indirect jobs
- £29bn annual turnover
- 17% global market share
- 90% of turnover to export markets
- UK Aerospace is growing 10x faster than the rest of the UK economy
- Current backlog of 11,000+ aircraft and 20,000 aircraft engines is worth around £150bn to the UK economy
- ADS has 850+ UK members (from SMEs to globals)
(Information courtesy of www.adsgroup.org.uk)
British Automotive at a glance
- 161,000+ direct jobs // 78,000 employed across UK supply chain
- 2,000+ automotive suppliers in the UK – including 16 of world’s top 20
- £64.1bn annual turnover
- 80% of a vehicle can be manufactured in the UK
- 5m cars and 2.4m engines built in 2014
- Annually adds £12.4+bn to the UK economy
- Annually producing £34bn of exports – accounting for 11% of the UK’s total export goods
- SMMT has 550+ UK members
(Information courtesy of www.smmt.co.uk)
British Chemical & Pharmaceutical at a glance
- 105,000 (Chemical) and 53,000 (Pharmaceutical) direct jobs // 500,000 indirect jobs
- 30,000 employed in related R&D (7,000 – Chemical, and 23,000 – Pharmaceutical)
- Annually adds £15.2bn to the UK economy
- Adds £60m to the UK balance of trade every day
- UK’s largest manufacturing export sector (£24.7bn – Chemical and £20.7bn – Pharmaceutical)
- CIA members have a combined turnover of £50bn
(Information courtesy of www.cia.org.uk)
British Construction at a glance
- 1m direct jobs // annually provides upwards of 80,000 new job opportunities
- Employs just under 200,000 women in the sector
- Annually adds £92bn+ to the UK economy – represents 6,4% of the total economic output
- 35+% of construction employees run their own companies
- More than a quarter of employers have recruited a school leaver in the past 2-3 years
- Almost 50% of employers in the building services engineering industry take part in the modern apprenticeship scheme
(Information courtesy of www.cic.org.uk)
British Defence at a glance
- 146,000 direct employees // Almost the same number in indirect jobs
- Employs 4,900+ apprentices and trainees
- £22bn annual turnover
- The UK is the world’s second biggest defence exporter behind the US
- 34% export growth between 2009 – 2013
- 9,000+ defence companies including SMEs exist in the UK
- BAE Systems – the UK’s largest defence company – currently employs 40,000 domestically
(Information courtesy of www.adsgroup.org.uk)
- 800,000+ direct jobs
- £78bn annual turnover
- 95%+ of the sectors 6,000 businesses are SMEs
- UK Electronics is the world’s fifth largest in terms of production
- 14 of the world’s top 20 semiconductor companies have established design and/or manufacturing sites in the UK
- In semiconductors, almost 80% of the activity comes from foreign direct investment
(Information courtesy of www.techuk.org)
British Energy at a glance
- 680,000+ direct jobs
- Annually adds £5,7bn to the UK economy
- Invested £13.1bn in infrastructure during 2013
- Renewables (wind; wave; marine; hydro; biomass, and solar) produce 7% of the UK’s electricity – likely to increase to around 20-25% by 2020
(Information courtesy of www.energy-uk.org.uk)
British Food & Drink at a glance
- 400,000+ direct jobs – predicted to need almost 110,000 new recruits by 2022
- Annually adds £21.5bn to the UK economy
- Accounts for 16% of total UK manufacturing turnover – making it the largest sector
- 96% of the sector’s 6,360 businesses are micro to medium-sized
- Exports £12.8bn+ products a year – 77% of which go to the EU
- Invested £1bn+ in to R&D in 2011, resulting in over 8,500 new products
(Information courtesy of www.fdf.org.uk)
British Furniture at a glance
- 115,000+ direct jobs // 190,000+ indirect jobs
- Annually adds £9.4bn+ to the UK economy
- 84% of the 8,360 companies turnover less than £1m a year // 59% less than £250,000
(Information courtesy of www.britishfurnitureconfederation.org.uk)
- 63,000 direct jobs // 80,000+ indirect jobs
- Companies in the UK nuclear industry have the capability to provide 80+% of the work involved in new nuclear power station projects
- 16 reactors on nine sites currently supplies 19% of the UK’s electricity
- Over the next two decades, it is forecast that globally there will be £930bn investment in constructing new reactors and £250bn in decommissioning those coming off-line
- The NIA represents 260 UK-member companies across the supply chain
(Information courtesy of www.niauk.org)
- 180,000+ direct jobs
- £19bn annual turnover
- 7,500 companies in the sector
- 35% of manufactured plastics products exported – valued at £6.7bn
- 5m tonnes of plastics raw materials produced annually
(Information courtesy of www.bpf.co.uk)
- 30,000 direct jobs
- 54% of UK Steel workers work in Yorkshire and the Humber, or Wales
- Annually adds £9.5bn to the UK economy
- Exports worth £4.9bn in 2013
- 1m tonnes of output in 2014
- The value of the industry has declined by almost a quarter (24%) since 1990
- More waste steel is recovered in the UK and recycled than all other materials combined
- Each tonne of scrap recycled by the industry saves 1.9 tonnes of iron ore and 0.6 tonnes of coal
(Information courtesy of www.eef.org.uk/uksteel)
- 34,300+ direct jobs // 72,000+ indirect jobs
- Annually adds £4.8bn to the UK economy
- Achieved 27% growth since 2010
- Largest application is broadcasting, followed by telecommunications
- Services support disaster relief; telemedicine; navigation, and broadcasting
(Information courtesy of www.adsgroup.org.uk)
British Textile at a glance
- 340,000+ direct jobs across 79,000+ companies
- Annually adds £11.5bn+ to the UK economy
- Gross value added (GVA) per head measured at an average of £34,220
- Third-largest fashion employer in the EU – behind Italy and Germany
- British consumers spend annually almost £55bn on the high street
(Information courtesy of www.fashionunited.co.uk)