According to the Make UK/BDO Annual Manufacturing Outlook Report, Scotland, Wales, and Northern Ireland have experienced notable increases in manufacturing jobs over the past year, contrasting sharply with declines across most English regions.
In Wales, manufacturing jobs rose by 13,000, while Scotland saw an increase of 10,000 and Northern Ireland added 2,000 jobs. Conversely, every English region, with the exception of the East of England, witnessed a decrease in manufacturing employment, resulting in an overall decline of 34,000 jobs across England during the same period.
Make UK attributes the growth in Wales to robust activity in the Aerospace & Defence sectors, particularly evident in the significant supply chain networks. This sector, primarily driven by Transport Equipment (mainly aerospace), constitutes 15.5% of Wales’ manufacturing output. Meanwhile, Scotland’s job growth is largely linked to increased investment in renewables, particularly offshore wind projects.
Despite these positive developments, the report underscores ongoing challenges in the sector, notably the severe shortage of skilled labor, with 64,000 vacancies currently unfilled. Make UK estimates this shortage is costing the economy £6 billion annually in lost output. The organization urges the new government to prioritize addressing these skills gaps and reforming technical education as central components of its industrial strategy.
Verity Davidge, director of policy at Make UK, emphasized the critical role of manufacturing in driving economic growth and creating high-value, high-skill jobs across the UK. She called for a comprehensive, long-term industrial strategy that integrates regional growth priorities, infrastructure investment, and innovation support.
Richard Austin, head of manufacturing at BDO, highlighted the resilience of manufacturers in navigating multiple challenges in recent years and emphasized the opportunity for collaboration with the new government to develop a robust industrial strategy. This strategy, he believes, should focus on enhancing productivity, addressing skills shortages, and attracting vital investments to foster economic growth and prosperity.
The report also examines the growth in Gross Value Added (GVA) across regions over the past decade, illustrating substantial output increases despite challenges posed by Covid-19, Brexit, and the energy crisis. Yorkshire & Humber, the North East, and the South West emerged as leaders in GVA growth, surpassing the UK average.
Moreover, the report stresses the significant contribution of manufacturing to regional economies, with all regions except the South East & London benefiting from above-average manufacturing contributions. This underscores the importance of tailored regional industrial strategies aimed at boosting economic performance and reducing inequality.
In conclusion, while most regions have rebounded above pre-pandemic output levels, challenges persist, particularly evident in the West Midlands due to sectoral downturns in automotive manufacturing and the shift towards electric vehicle production.