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The 4 industries to thank for manufacturing’s recovery

UK manufacturing is now close to returning to pre-recession levels, but the recovery is nearly all due to growth in just four industries: food, motor vehicles, transport equipment and machinery repair.

The finding comes from newly-published figures on the performance of the manufacturing sector between 2008 and 2018 from the Office for National Statistics (ONS).  

Despite overall performance now just below the levels seen before the recession hit in 2008, many industries have not still not recovered. In fact, if it wasnt for food, motor vehicles, other transport equipment (covering ships, locomotives, aircraft, military vehicles and motorcycles) and repair and installation of machinery, UK manufacturing would still be below its lowest value during the recession. 

Manufacturing was severely affected by the 2008 recession, falling by 12.3 per cent in just one year. Since then, the sector has averaged quarter-on-quarter growth of 0.3 per cent, finishing the decade at 2.7 per cent below the pre-recession level. 

Manufacturing of transport equipment and motor vehicles have performed the best in this time, increasing their percentage contribution to growth by 3.4 per cent. This is followed by food products (2.3 per cent) and repair and installation of machinery (1.1 per cent). Other industries to experience minimal growth include apparel, non-alcoholic beverages, computer electronic and optical products, textiles and paper products. 

However, the contribution of nearly every other industry has contracted in the past ten years, particularly pharmaceuticals (-3.5 per cent), specialist machinery (-2.0 per cent), printing (-1.9 per cent) and basic metals (-1.6 per cent).  

The manufacturing of motor vehicles played a particularly strong role during a prolonged period of very slow growth between 2012 and 2016, where it accounted for 39 per cent of all manufacturing growth. However, this strength did not last beyond that period, with motor vehicle manufacturing losing 0.7 percentage points in the last two years - more than any other industry.  

Meanwhile, most of the growth in manufacturing since the 2016 EU referendum has been export driven, with export turnover increasing by 14 per cent and domestic turnover increasing by just 2 per cent.

For more manufacturing data from the ONS, visit www.ons.gov.uk/businessindustryandtrade/manufacturingandproductionindustry

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