New Report reveals the “True Impact of UK Manufacturing”

27 Apr 2018

Manufacturing accounts for nearly a quarter of the economy (23%) and more than 7.4 million jobs depend on it according to new research commissioned by the Manufacturing Technologies Association (MTA) and published in April 2018.

For the first time ever, the study by consultancy Oxford Economics has taken into account the full impact of the UK’s manufacturing economy, including the indirect effect of increasingly complex supply chains and the induced effect of the spending that manufacturers wages create in the economy.

The headline findings from the report highlight that the sector is responsible for 23% of UK GDP, well over double the figure that is usually quoted and is responsible for 5 million more jobs than often thought.

“This report clearly demonstrates that anyone who says that manufacturing doesn’t matter much to the UK’s economy is badly mistaken,” explained James Selka, CEO of the MTA.

“The figures that people often quote setting 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. For every £1 million the manufacturing sector contributes to GDP itself, it creates another £1.5 million elsewhere in the UK economy and for every direct job within the sector, another 1.8 are supported elsewhere in the UK economy”

He continued: “Manufacturing creates a wealth that is irreplaceable and we need to make sure that Government policies promote and grow it.”

As well as the headline figures on the impact of the sector there are fascinating 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.

“There is an opportunity, through the Industrial Strategy, to increase productivity levels further still and to help the UK economy grow and boost our exports by encouraging manufacturing investment to take advantage of new technologies such as Big Data, AI and Additive Manufacturing,” added James.

The True Impact of Manufacturing report was launched at MACH 2018, the UK’s largest industrial trade exhibition.

Many thanks to our colleagues at the MTA for permission to reproduce this article – please visit the MTA website to download a free copy of the full report click here