UK Regions and Nations see manufacturing jobs boost

But Labour challenges remain with vacancies unfilled

 

Key findings:

 

  • The number of manufacturing jobs has grown in six of eight English regions and Wales
  • Yorkshire & Humber sees the biggest increase in manufacturing jobs
  • Red wall areas and Wales see manufacturing share of regional and national economies substantially above average
  • But levelling up remains a challenge as London and the South East sees the biggest post-pandemic increase in manufacturing GVA
  • 74,000 vacancies remain unfilled, a £6.5bn output gap

The number of jobs in manufacturing has grown in six of eight English regions along with Wales, highlighting the importance of the sector to hopes of levelling up across the UK by creating high skill and better paid jobs.

According to Make UK, the figures also counter the long-held narrative of inevitable decline in manufacturing employment and show, as is happening in the US, that growing manufacturing jobs and the sector’s share of the economy is a realistic prospect given a supportive policy framework.

The findings come in the Make UK/BDO Annual Manufacturing Outlook Report which provides a comprehensive analysis of the contribution of manufacturing to each English region and devolved Nation. It analyses a number of metrics including industry’s share of regional and national economies, number of jobs and share of regional/national employment, together with sectoral analysis.

However, despite the increase in the number of jobs across most English regions, Make UK stressed that substantial labour challenges remain. According to the latest official data, 74,000 vacancies remain unfilled, at a cost in economic output of approximately £6.5bn.

Verity Davidge, Director of Policy at Make UK, said:

“Industry remains critical to the growth of the economy, providing high value, high skill jobs and aiding the process of levelling up. But, if we are to address the current anaemic growth prospects for the sector and the economy overall we need bold measures at national and regional level. This must include both a national industrial strategy which allies with local growth strategies to fit with the priorities and strengths of each region, including infrastructure, innovation and skills in particular.”

Richard Austin, Head of Manufacturing at BDO said:

“The manufacturing jobs growth we have seen across the last year is testament to the resilience of the sector as a whole. Manufacturing companies across the UK have had to overcome the multiple challenges thrown up by Brexit, shortages in skilled labour, pandemic-related supply chain delays and the huge energy price rises we have seen following the Russian invasion of Ukraine. While everyone is hoping for some respite, the headwinds show no sign of abating. With high inflation and interest rates continuing to rise, manufacturers will need to remain alert, responsive and resilient in the face of any future geopolitical or economic shocks.”

According to official data, Yorkshire & Humber saw the biggest growth in manufacturing jobs (1), adding 46,000 jobs in 2022 compared to 2021, bringing the total number to 316,000, more than one in ten (11%) of the region’s workforce. According to Make UK this is possibly due to the growth of Food and Drink sector post pandemic given it accounts for almost a fifth (16.3%) of regional output. The second largest sector in the region is Chemicals which has also performed strongly in recent years, closely followed by Basic Metals.

The South West saw the second highest increase, a further 28,000 jobs bringing the total to 249,000, 8% of the region’s workforce. This was closely followed by the East of England, adding 27,000 jobs bringing the total to 228,000, 7% of the region’s workforce. The East and West Midlands, together with London and the South East, Wales and Northern Ireland also saw increases in the number of manufacturing jobs.

The report also highlights the importance of manufacturing and jobs to so-called ‘red wall’ areas where the sector occupies a substantially higher than average contribution to the regional economy. The average regional share of manufacturing nationally in the UK (2) is just under 10% (9.8%), whereas in Wales the sector accounts for almost a fifth of the economy (17.3%), whilst it is also substantially above the average as a share of the economy in the East Midlands (16.4%), Yorkshire & Humber (15.4%), North East (15%), West Midlands (14.4%) and the North West (14%).

However, as well as highlighting the strengths of manufacturing across regions and nations, the report also shows the challenges which still remain for levelling up and, the implications for policies to promote it. According to the most up to date official data available on regional manufacturing Gross Value Added (GVA) (3) all regions and nations, apart from the West Midlands, had recovered to pre-pandemic levels of output by 2021.

But, while the percentage increases in GVA among the majority of regions and nations were in low single figures, London and the South East had increased its GVA in 2021 compared to pre-pandemic levels by almost a fifth (19%).