UK Manufacturing: The Facts 2024

A look at the current state of UK manufacturing

In an era of rapid technological advancement and global economic shifts, the UK manufacturing sector finds itself at a pivotal crossroads. Today we published our annual factcard, "UK Manufacturing: The Facts 2024," providing a comprehensive overview of the sector's current landscape, challenges, and opportunities.

The factcard highlights the sector's contribution of £217 billion to the UK economy, the support of 2.6 million jobs, and an impressive £38.8 billion investment increase compared to 2023. Despite these encouraging figures, the UK has dropped out of the top ten global manufacturing nations.

Economic contributions and salaries

The manufacturing sector remains a cornerstone of the UK economy, contributing £217 billion in output and supporting 2.6 million jobs. Investment in the sector has also increased significantly, reaching £38.8 billion. One notable highlight is the sector's strong wage growth, with the average manufacturing salary rising to £38,769, which is 10% higher than the overall economic average. This underscores the sector’s ability to offer well-paid employment compared to the services sector, where average salaries are £34,698.

Export and import dynamics

The United States continues to be the UK’s largest export market, with exports reaching £61.8 billion, up from £56.7 billion last year. However, the importance of European markets remains clear, as six of the UK’s top ten export markets are within the EU, collectively worth approximately £150 billion. This highlights the ongoing need for stable trade relations with the EU, despite Brexit-related challenges.

On the import side, Germany is the UK's largest supplier of manufactured goods, with imports valued at £73.8 billion. This reflects the deeply interconnected nature of UK and EU manufacturing sectors and underscores the importance of maintaining strong trade relationships.

Regional and sectoral insights

Regionally, the North West of England leads in manufacturing output, contributing £29.5 billion, followed closely by the South East at £26.1 billion. The East Midlands stands out with the highest share of manufacturing within its regional economy, at 15.9%. Sector-wise, food and drink, alongside transport (primarily aerospace and automotive), are the largest contributors to the sector's gross value added, accounting for 21% and 15%, respectively.

Global positioning and the need for a long-term strategy

For the first time, the UK has fallen out of the top ten global manufacturing nations, now ranking twelfth. Countries like Mexico and Russia have overtaken the UK, partly due to substantial foreign investments and shifts in global economic strategies. Mexico, benefiting from significant Chinese investments, and Russia, driven by increased defence production, have seen their manufacturing outputs surge. Taiwan has also edged ahead, leveraging its semiconductor industry dominance.

This stresses the importance of a long-term industrial strategy to leverage the UK’s strengths. Without such a strategy, the UK risks falling further behind nations that are actively fostering manufacturing growth through well-defined policies.

You can find further information and download the factcard on our website here

GB Energy: implications for manufacturers

The recent announcement of GB Energy comes at a crucial time for UK manufacturers. As the UK strives to meet its net-zero targets, GB Energy aims to expand the National Grid’s capacity and improve industrial grid connections, essential for the manufacturing sector's transition to electrification. This move promises to ensure competitive industrial electricity prices, providing a fair platform for decarbonization while supporting the industry's growth.

Manufacturers must adapt to new energy realities, balancing the need for sustainable practices with the demands of maintaining production efficiency and cost-effectiveness. The expansion of the National Grid and improvements in freight and transport capacity—especially outside London and the South East—are crucial steps toward enabling industrial growth and rebalancing the economy.

The announcement of GB Energy presents a unique opportunity to align the sector's energy needs with environmental goals, potentially setting the stage for a more sustainable and competitive manufacturing industry.

However, the devil is in the details, and only time will tell whether GB Energy is help or hinderance…