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British manufacturing continues climb up global rankings

18 September 2017

British manufacturing continued its climb up the global rankings as growth returned last year, according to facts and figures published by EEF and Santander.

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Launching the 2017 manufacturing fact card, the new data shows that Britain is now the 8th largest industrial nation with an annual output now worth $249bn, up from 9th place last year.

In the post-Brexit world, manufacturing will increasingly provide Britain’s link to the world, currently generating 44 percent of total UK exports. The sector is also vital for the nation’s future source of income, undertaking some 70 percent of total R&D by Britain’s businesses. Data around employment is equally impressive, with 2.6 million people working within the manufacturing sector across the country.

The largest individual sector is food and drink (16 percent) while the chemicals and pharmaceuticals and transport sectors both account for 14 percent of output each. It is these two sectors which also head up the manufacturing innovation league table, with ONS figures revealing that pharmaceuticals accounts for 34.4 percent of UK innovation, and transport 33 percent.

As a sector, the manufacturing good news story continues into comparable pay rates, offering higher wages than other sectors with highly paid, highly skilled jobs. Average earnings have increased from £31,489 to £32,047, still sitting well above the take home totals from services (+£4,499) and some £3,748 more than the whole economy average pay.

Manufacturing is spread across the country – the North West remaining the biggest regional powerhouse, producing over £24bn output. Manufacturing also helps power the engine of the West Midlands (£17.5bn) and East Midlands (£15.9bn), with their strength across the aerospace and automotive sectors.

A reminder of the post-Brexit challenge is ever present as EU markets still dominate for exports, accounting for 48 percent of manufactured exports in 2017q2. The UK’s largest single export destination is the United States, followed by Germany and France.

Commenting, Lee Hopley, Chief Economist of EEF said: “With government facing lots of major policy decisions on everything from our future trading relationship with Europe and the rest of the world to the detail of a long-term industrial strategy it is vital that they have the right industry facts at their fingertips. Our latest annual fact card reveals that manufacturing’s share of the economy remains stable at 10 percent, but the sector makes a much larger contribution to vital exports and innovation.

“With the focus on industrial strategy, this year we highlight the varying strengths we see across manufacturing sub-sectors, from the strong R&D performance of pharmaceuticals and transport to the high export intensity of machinery and chemicals.”

Commenting, Paul Brooks, Head of Manufacturing, Santander Corporate & Commercial, said: “Manufacturing remains a key part of the UK economy and it is really encouraging to see that the UK is now the 8th largest manufacturer by output in the world, and that the majority of UK adults believe we should be aiming to be in the top five. With strong manufacturing figures reported from across the country, it is crucial that we continue to support manufacturers in all regions of the UK. Despite uncertainty around Brexit, manufacturers are seizing opportunities to increase their now more competitive exports, with the sector accounting for 44 percent of UK exports. With the top 10 export destinations featuring markets both within and outside of the EU, Santander is committed to helping manufacturers reach new markets.”

You can download the fact card here.

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