The manufacturing industry occupies an important position in the British economy. Although the UK has declined in industrial scale, it still has some of the world’s top companies in steel, pharmaceuticals, biological breeding, aerospace, machinery, microelectronics, military, and environmental sciences, etc. All aspects are among the best in the world.
British Manufacturing Statistics
Although there has been a decline since the 1970s, when manufacturing contributed 25% of the UK’s GDP, the UK is currently the ninth-largest manufacturing country in the world. Overall, the British industrial sector has grown 1.4% annually since 1948.
The growth of the UK manufacturing market is due to better quality; more skilled labor; production shifts from low-productivity products to high-productivity products; automation and technology improvements; increased investment in research and development, and a more integrated global economy.
Current British manufacturing industry statistics:
- 2.7 million people employed-average income of £32,500
- Contributed 11% of GVA
- 45% of the total exports; a total of 275 billion pounds
- Accounts for 69% of business research and development (R&D)
- Provides 13% of business investment
Although the contribution of manufacturing to GDP has declined compared with the past, many services provided to manufacturers were once regarded as part of manufacturing, such as catering, construction services, security, logistics, etc. Some services were allocated to different economies field. 91Ƶever, these contributions are directly dependent on the continuous business of the manufacturing industry and can be regarded as part of the manufacturing GDP input.
2019 Annual UK Manufacturing Report
Summary:
- 81% of respondents said they are ready to invest in new digital technologies to increase productivity
- 71% of British manufacturers say that Brexit is damaging strategic planning and business prospects
- 64% of respondents said Brexit will bring chaos to manufacturing
- 55% said the government can do more to promote exports
- 57% said that the education system is a disaster for the industry and needs to be completely reformed
- 66% said that Britons do not understand the importance of manufacturing to the economy
The 2019 manufacturing report is divided into five parts: government policies and industrial strategies; financing and investment; skills and training; growth and exports, and smart factories.
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Smart factory: The potential is huge, but it requires a clear strategy and strong leadership
The smart factory part of the report measures attitudes towards the potential of digital technology. It is not just that the uncertainty of Brexit has caused many manufacturers to hesitate to invest in technologies that can change their businesses. The main obstacles appear to be the lack of a coherent digital strategy and the inability of organizations to understand the practical applications that some of these technologies provide within their organizations.
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Government policies and industrial strategies: confidence in government policies is weak, but the industry is resilient
Most manufacturers said that their strategic plans are at risk. Many manufacturers believe that Brexit will bring the manufacturing industry into chaos, but 77% of manufacturers still have confidence in the industry.
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Skills and training: manufacturing employers desire skilled engineers
The crisis facing the manufacturing industry today is that the skill gap has increased, the elderly members of the industrial labor force have retired, the number of young people receiving professional education and training is insufficient, and there is a fault in the connection of manpower. As a result, companies have established training programs and academies, actively looking to supplement industry talents.
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Growth and exports
In terms of business growth, especially through export growth, manufacturers still believe that overseas growth potential is huge. 77% of manufacturers said that the British manufacturing industry has the motivation to succeed. The future of manufacturing lies in the right people working with the right systems. The performance of the British manufacturing industry is on the rise. As manufacturers realize the potential of Industry 4.0, the continued digitalization of the industry plays a key role in this growth. Brexit may bring significant opportunities to the British manufacturing industry. In the past, it was more cost-effective to outsource various elements of the manufacturing process overseas. Current and future technological advancements mean truly viable options, and "Made in Britain" will be the key to helping Britain maintain its leading position.
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Financing investment: investment uncertainty
The annual manufacturing report clearly shows that the 2008 crash still has sequelae, and manufacturers are reluctant to seek bank financing for investment. A 64% majority said they would prefer to use their resources to fund investments rather than borrowing. The manufacturer’s annual report provides valuable insights into the manufacturing industry. Uncertainty is still a concern for investors, and it is important to develop innovation and technology that can facilitate the making of strategic decisions on time.
Breakdown statistics of various industries in UK manufacturing
Overview of Aerospace:
- 128,000+ direct jobs, 140,000 indirect jobs
- Annual turnover of 31 billion pounds
- 30% productivity growth in the past five years
- An increase of 39% since 2010
- 18% of the global market share Europe's largest, second in the world, second only to the United States
- 90% of turnover goes to the export market worth £26 billion
- Have nearly ten years of work value on hand, and there are more than 13,000 aircraft orders to the UK, worth up to 195 billion pounds
Overview of Cars:
- More than 169,000 direct jobs, 78,000 employees in the UK supply chain; 25,000 new jobs will be created to cover the production of connected and autonomous vehicles
- More than 2,000 automotive suppliers in the UK-including 18 of the world's top 20
- Annual turnover of 71.6 billion pounds; 80% of vehicles can be made in the UK
- Adds more than 12.4 billion pounds to the UK economy every year
- Annual exports of 34.3 billion pounds accounted for 12% of the UK's total exports
Overview of Chemical and Pharmaceuticals:
- 105,000 (chemical) and 53,000 (pharmaceutical) direct jobs, 500,000 indirect jobs
- 30,000 people are engaged in related research and development (7,000 in the chemical industry, 23,000 in the pharmaceutical industry)
- Adds 15.2 billion pounds to the UK economy every year
- Adds 60 million pounds to the UK’s trade balance every day
- The largest manufacturing export sector in the UK (Chemicals £24.7 billion and pharmaceuticals £20.7 billion)
- The total turnover of CIA members is £50 billion
Overview of Architecture:
- 1 million direct jobs, providing more than 80,000 new job opportunities every year
- The industry employs nearly 200,000 women
- Adds more than 92 billion pounds to the British economy every year-accounting for 6.4% of the total economy
- 35%+ of construction employees run their own company
- In the past 2-3 years, more than a quarter of employers have recruited school leavers
- Nearly 50% of employers in the building services engineering industry participate in the modern apprenticeship program
Overview of Defense:
- 142,000 direct employees, almost the same as indirect employees
- Employing more than 4,300 apprentices and interns £24 billion in annual turnover
- 18% increase since 2010
- The United Kingdom is the world's second-largest defense exporter after the United States, and generates an average of £7.7 billion in revenue for the United Kingdom each year
- Exports grew by 34% between 2009 and 2013
- There are more than 9,000 defense companies in the UK, including SMEs
Overview of Electronics:
- More than 800,000 direct jobs
- Annual turnover of 78 billion pounds
- More than 95% of industries, 6,000 companies, are SMEs
- Electronics ranks fifth in the world in terms of output. 14 of the world's top 20 semiconductor companies have established design or manufacturing bases in the UK
- In the semiconductor sector, nearly 80% of activity comes from foreign direct investment
Overview of UK Energy:
- 137,000 direct jobs, 500,000 indirect jobs
- Adding £5.5 billion to the UK economy every year
- Carbon emissions in the energy sector were reduced by 13% in 2015
- Renewable energy generation has increased by 30% from 2014 to 2015
- GBP 18 billion was invested in infrastructure, power generation, distribution, metering, and customer service in 2015
Overview of Food and Beverages:
- 400,000 direct jobs, estimated to require nearly 110,000 new employees by 2022
- Adds £21.9 billion to the UK economy every year
- It accounts for 16% of the total turnover of the UK manufacturing industry, making it the largest sector
- Productivity has increased by 11% in the past five years. 96% of the 6,360 companies in the industry are small and medium enterprises
- Exports worth £12.8 billion per year, 77% of which go to the EU
Overview of Nuclear Power:
- 63,000+ direct jobs, 80,000+ indirect jobs
- The British Nuclear Industry Corporation is capable of providing more than 80% of the work in new nuclear power plant projects 16 nuclear reactors in 9 locations, currently supplying 19% of the electricity in the UK
- In the next 20 years, it is estimated that 930 billion pounds will be invested globally in the construction of new nuclear reactors, and 250 billion pounds will be used to decommission those nuclear reactors that are about to be shut down.
- There are currently 15 nuclear reactors in operation in the UK
Overview of UK security:
- 76,0,00 direct jobs
- Annual turnover of 9 billion pounds
- Increased by 65% since 2010
- The UK is the world's sixth-largest exporter of safety equipment
- The average export value to the UK is £2.9 billion
- Benefits include national infrastructure; cybersecurity; policing and counter-terrorism; border security, security for major incidents.
Overview of Steel:
- 30,000 direct jobs
- 54% of British steelworkers work in Yorkshire and the Humber or Wales
- Adds 9.5 billion pounds to the economy every year
- Exports in 2013 were 4.9 billion pounds
- Production of 1 million tons in 2014
- Since 1990, the value of the industry has fallen by nearly a quarter (24%)
- The UK recycles more scrap steel than all other materials combined
- The industry can save 1.9 tons of iron ore and 0.6 tons of coal per ton of scrap steel
Overview of Space:
- 34,000+ direct jobs, 72,000+ indirect jobs
- Annual turnover of 11 billion pounds
- The annual growth rate of more than 8%
- Exports to the UK worth £4 billion
- Achieved 27% growth since 2010
- The largest application is broadcasting, followed by telecommunications
- Services support disaster relief, telemedicine, navigation, and broadcasting
Overview of Textiles:
- More than 340,000 direct jobs in more than 79,000 companies
- Adds more than 11.5 billion pounds to the British economy every year
- The average gross value added (GVA) per capita is £34,220
- The third-largest fashion employer in the European Union, after Italy and Germany
- British consumers spend nearly £55 billion on the streets each year
Europe remains the dominant market for British goods
The industry still ranks among the top ten in the world:
- Annual output value to the overall economy reaches 192 billion pounds
- Exports to the EU are more than twice the value of exports to the United States
- In terms of exports and R&D, the manufacturing industry still leads the way
- The world's 10th largest exporter and 7th largest trade exporter
- The average salary in the manufacturing industry is still significantly higher than the overall level of the service industry and the economy
- The UK is still ranked ninth among the top ten manufacturing countries
The importance of the UK’s agreement with the EU to avoid trade barriers is fully revealed today. The analysis shows that the value of trade with the EU is more than twice that of the US, and seven of the UK’s largest export destinations are within the EU. The United States is the largest single export market for British manufactured goods and services, valued at £118.2 billion. In the same period, exports to the top seven EU markets alone reached 236.5 billion pounds (256.1 billion pounds including Switzerland).
Breakdown by industry, exports of manufactured goods are dominated by transportation (25.5%) and pharmaceuticals and chemicals (17.9%), which highlights the importance of these high value-added industries to the success of the UK's entire industrial, aerospace, and automotive industries specific.
The importance of the first two main export sectors is also reflected in their contribution to commercial research and development, with pharmaceuticals and chemicals and transportation sectors accounting for nearly 70% of the total expenditure between them.
The transportation sector also led the export growth of 7.4%, mainly due to the continuous growth of the aerospace business, followed by food and beverages, with export growth of 5.3%.
Manufacturing remains at the core of overall economic success, accounting for two-thirds of overall R&D, 45% of exports, 15% of business investment, and 2.7 million high-value jobs, which are paid higher than the economic average. With an annual output value of 192 billion pounds, the UK is still the ninth largest manufacturing country in the world.
This analysis broke the dilemma of low wages for manufacturing jobs. The average wage in the manufacturing industry was 33,592 pounds, while the average wage in the entire economy was 29,832 pounds, and the average wage in the service industry was 29,014 pounds.
In terms of industry size, food and beverages are still the largest industry contributing 15.1% of GVA, worth about 73.1 billion pounds, followed by transportation (14.9%, worth 72.1 billion pounds) and pharmaceuticals and chemicals (14.2 %, valued at 68.7 billion pounds).
By region, the Northwest region is the most productive region with a value of 28.5 billion pounds, followed by London and the South East with a value of 28.1 billion pounds.
Although the United States is still the largest market and provides important opportunities for export growth, it is a fallacy to think that geography is not the biggest factor driving trade. For British manufacturers, access to their largest market must be a premium. That is to say, the United Kingdom is still one of the top ten manufacturing countries. Manufacturers hope to see policymakers working with the industry to help promote the ranking of the British manufacturing industry.
In the UK's the influence of export, has always been far greater than domestic consumption, and employment opportunities across the UK have depended on industrial development. The UK must remain a strong trading ally with Europe and manufacturing will continue to support the United Kingdom to maintain its status as a major global economy and exporter.