Manufacturing accounts for nearly a quarter of the entire UK economy and more than 7.4 million jobs depend on it according to new research commissioned by the Manufacturing Technologies Association (MTA).
According to the MTA the figures show that the sector is responsible for 23% of UK GDP, well over double the figure that is routinely quoted and is responsible for 5 million more jobs than often thought.
According to the MTA the study by world leading economics consultancy Oxford Economics is the first of its kind to take into account the full impact of the UK’s manufacturing economy, including the indirect effect of increasingly complex supply chains and the induced effect of the spending that manufacturers wages create in the economy.
The impact of manufacturing is felt far outside factory gates in offices, laboratories, shops and warehouses right across the country.
“This report clearly demonstrates that anyone who says that manufacturing doesn’t matter much to the UK’s economy is badly mistaken,” said James Selka, CEO of the MTA.
“The figures that people often quote setting manufacturing alongside the service sector miss the point that a huge part of the service sector – from logistics, to research, to catering – serves manufacturing. The impact is felt far outside factory gates in offices, laboratories, shops and warehouses right across the country. For every £1 million the manufacturing sector contributes to GDP itself, it creates another £1.5 million elsewhere in the UK economy and for every direct job within the sector, another 1.8 are supported elsewhere in the UK economy”
The report includes statistics around industry’s contribution to the UK’s export performance (48% of exports are manufactured goods) and R&D investment, with manufacturers accounting for nearly 70% of the total spend.
It also reveals that manufacturing productivity is £67,000 per year (higher than the UK average of £56,700) and that the median wage in industry is £27,400 – meaning that on average manufacturing workers take home 19% more than other workers.
“There is an opportunity, through the Industrial Strategy, to increase productivity levels further still and to help the UK economy grow and boost our exports by encouraging manufacturing investment to take advantage of new technologies such as Big Data, AI and Additive Manufacturing,” added Selka.
The True Impact of Manufacturing was launched today at the opening of MACH 2018, the UK’s largest industrial trade exhibition.