Manufacturing accounts for nearly a quarter of the UK economy and more than 7.4 million jobs depend on it, according to new research commissioned by the Manufacturing Technologies Association (MTA).
For the first time, ‘The True Impact of Manufacturing’ study by economics consultancy Oxford Economics has taken into account the full impact of UK manufacturing, including the indirect effect of increasingly complex supply chains and the induced effect of the spending that manufacturers wages create in the economy.
The figures show that the sector is responsible for 23% of UK GDP, well over double the figure that is routinely quoted and is responsible for 5 million more jobs than often thought.
CEO of the MTA, James Selka explained: “This report clearly demonstrates that anyone who says that manufacturing doesn’t matter much to the UK’s economy is badly mistaken.
“The figures that people often quote setting UK manufacturing alongside the service sector miss the point that a huge part of the service sector – from logistics, to research, to catering – serves manufacturing.”
The impact is felt far outside factory gates in offices, laboratories, shops and warehouses right across the country, he continued.
“For every £1m the manufacturing sector contributes to GDP itself, it creates another £1.5m elsewhere in the UK economy and for every direct job within the sector, another 1.8 are supported elsewhere in the UK economy.”
Adding: “Manufacturing creates a wealth that is irreplaceable and we need to make sure that government policies promote and grow it.”
The headline figures on the impact of the sector are supported by insights into the true impact of manufacturing.
The MTA report includes statistics around industry’s contribution to the UK’s export performance (48% of exports are manufactured goods) and R&D investment, with manufacturers accounting for nearly 70% of the total spend.
It also reveals that manufacturing productivity is £67,000 per year (higher than the UK average of £56,700) and that the median wage in industry is £27,400 – meaning that, on average, manufacturing workers take home 19% more than other workers.
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