A new report has revealed that the sector also offers salaries above the national average and is more productive than was previously believed.
Manufacturing accounts for nearly a quarter of the economy and more than 7.4 million jobs depend on it according to new research commissioned by the Manufacturing Technologies Association (MTA).
For the first time ever, the study by world leading economics consultancy Oxford Economics has taken 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 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.
James Selka, CEO of the MTA said:
“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”
As well as the headline figures on the impact of the sector there are fascinating insights into the true impact of manufacturing.
The MTA 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”.