The Importance of Manufacturing to the UK Economy
It’s been a common refrain since the 1980s – “manufacturing in the UK is in decline” or sometimes even “manufacturing in the UK is dead”. This is usually accompanied by reminiscences about the strength of our mining, steel and car industries 40 years ago and mutterings about the over-reliance the UK economy places on service industries these days.
For those of us that manufacture products in the UK in the 21st century this is very annoying. It’s clear to us and our suppliers and customers that manufacturing in the UK is still very much alive. Ask anyone around the world what their perception of products manufactured in the UK is and they will reply “high quality and innovative design”.
So let’s take a look at the facts about what manufacturing contributes to the UK economy.
- The UK manufacturing sector accounts for £192 billion of output employing 2.7 million people each with an average salary of £33,592 which is 13% higher than the rest of the economy.
- Manufacturing accounts for 44% of our global exports which is worth over £273 billion to the UK economy.
- Manufacturing accounts for 66% of R&D investment and 15% of total business investment.
- The UK is the 9th largest manufacturer in the world by output and the 10th largest exporter of goods.
And how is manufacturing spread around the UK? Some of the figures might surprise you….
- Northwest = £28.5bn
- West Midlands = £21.7bn
- South East = £20.3bn
- East of England = £17.8bn
- Yorkshire & Humberside = £17.6bn
- East Midlands = £17.2bn
- Scotland = £14.4bn
- South West = £14.3bn
- Wales = £10.9bn
- North East = £8.0bn
- London = £7.8bn
- Northern Ireland = £5.2bn
Where are our exports going?
- USA = £118.2bn
- Germany = £55.4bn
- Netherlands = £44.0bn
- France = £42.1bn
- Ireland = £38.3bn
- China = £23.1bn
- Italy = £19.7bn
- Switzerland = £19.6bn
- Belgium = £19.4bnSpain = £17.6bn
This last set of figures makes it very plain that our trading relationship with the EU is extremely important and it is vital that Prime Minister Johnson negotiates a good deal that allows as frictionless trade as possible with these valued partners.
The EU, taken as a whole is the UK’s largest trading partner and in 2018 UK exports to the EU were £289 billion (goods and services which accounts for 46% of all UK exports). But UK imports from the EU were £345 billion (goods and services which accounted for 54% of all UK imports).
Do we need to improve productivity? Yes.
Do we need to massively increase investment in Industry 4.0? Yes.
But next time you hear someone decrying the state of manufacturing in the UK I hope you’ll challenge them and point to all the cutting edge technology we invent, develop and manufacture in the UK today.
For more information on this fascinating subject https://www.makeuk.org/ is a good place to start and if you really want to delve in to the statistics I recommend you visit https://www.uktradeinfo.com/Pages/Home.aspx
Lucinda O’Reilly, Exports & Marketing Director is an integral part of the team that has grown Ecotile Flooring in to the successful manufacturing business it is today. Over the last 20 years she has successfully employed her skills in sales and marketing to ensure Ecotile Flooring is recognised as the market leading manufacturer of PVC interlocking floor tiles. Lucinda’s love of travel means the Ecotile brand is dominant all over Europe, North America, the Middle East, Asia and India.
To ensure compliance with export regulations Lucinda has gained accreditations from the Chamber of Commerce in Incoterms & Export Licence Controls and Export Procedures & Documentation and has completed the Institute of Export course on Incoterms 2020. She is a member of the Institute of Export, was a finalist in the Natwest Open to Export competition in 2018 and was instrumental in Ecotile Flooring winning a Queen’s Enterprise for International Trade in 2017. Lucinda has recently been interviewed by BBC News and Channel 4 News for her insights on Brexit and is an Export Champion for the Department for International Trade.