Growth in the Welsh advanced manufacturing sector is significantly outpacing the rest of the UK, with 11% average annual growth in total turnover for companies based in Wales over the past three years compared to a 0.4% decrease for all such UK companies, according to Hugh James, a Top-100 law firm.
Hugh James noted that total turnover for advanced manufacturing companies based in Wales grew 36% in the past three years to £1.6bn in 2015 from £1.2bn in 2012.
Advanced manufacturing includes such sectors as aerospace; biotech; nanotechnology; pharmaceutical, and semiconductors.
According to the law firm, the Brexit vote may create opportunities for manufacturing companies as the Government actively seeks to encourage international investment into the UK.
In the short term, the recent fall in sterling has also reduced many import costs for manufacturers.
Advanced manufacturing companies based in Wales also had the fastest increase in turnover compared to companies located in the rest of the UK. Companies based in England saw a 0.5% fall in turnover, while total sector turnover in Scotland decreased by 6.5%.
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Hugh James argued that the growth in advanced manufacturing companies’ turnover in Wales was in part driven by investment from the US pharmaceutical and biotech sector, alongside the expansion of semiconductor manufacturing in the region.
The business highlighted Wrexham in North Wales as a hub for the aerospace industry, with several major companies such as Airbus UK, Raytheon Systems, and Cytec Aerospace Materials based there.
Partner and Head of Commercial at Hugh James, Erica Westerman commented: “Advanced manufacturing is a critical sector for UK plc, so it’s incredibly exciting to see Wales leading the way in achieving such significant growth.
“The post-referendum fall in sterling should further help high tech manufacturers when exporting abroad. There is a lot of optimism in the industry at the moment after the vote.
“Possible increased foreign investment into the sector could help the wider Welsh economy, which has been hard hit by Tata Steel’s decision earlier this year to withdraw from the UK.”
Westerman continued: “Advanced manufacturing is essential for moving British industry up the value chain.
“Welsh businesses are at the forefront of driving innovation in fast-moving, cutting-edge areas such as aerospace, tech and pharma and they are seeing their turnover soar as a result.”
“If the UK is to maintain a robust manufacturing sector in the future, it must focus on the ‘advanced’ end of the market in the face of tough competition from lower-cost, higher-volume Chinese manufacturers.”
“As in many other advanced economies, the UK’s manufacturing sector is hard-pressed to compete on price, given high overheads, notably in staff and transport costs, so it must compete on the basis of its flair for innovation and expert skills instead.”