Chris Iveson, founder and CEO of FourJaw Manufacturing Analytics, sees positives for UK manufacturers in Make UK’s latest set of Facts, but believes ongoing global trade uncertainty could lead to contraction in the industry, especially those that have complex supply chains.
New figures released today by Make UK show that UK manufacturers produced £220 billion worth of output last year, £3 billion more than the year before, and increased their level of investment in the UK economy to £44 billion. The UK has become the 11th largest manufacturing economy in the world, up from 12th last year but still lower than where it has been for much of the last decade.
While the US remains the UK’s biggest destination for manufactured goods, worth £59 billion in export value in 2024, the proportion of goods in UK exports declined from 45% to 42% in the last year.
Chris Iveson, CEO at FourJaw Manufacturing Analytics, comments: “There are positives in Make UK’s latest set of Facts, but the reality is that producers are having to adapt to another economic storm many can ill afford. Trade uncertainty is affecting investment, export activity, and supply chains, and could lead to further contraction in the UK manufacturing sector. Many manufacturers I speak to have shelved their growth plans and are focusing on building adaptability and resilience into their operations. Those who succeed here will be well placed to create opportunities from uncertainty.”
“The story of UK manufacturing over the last decade is one of steady growth blunted by economic events and rising costs. The real value of manufacturing output declined in the aftermath of the Brexit vote and the pandemic, with ensuing uncertainty and inflation impacting manufacturers’ profit margins and competitiveness. Rising wages and national insurance contributions have increased labour costs further, and the industry faces even more uncertainty due to changes in US trade policy.
“Uncertainty is the enemy of big capital investment, but can also be the mother of invention. Many in our industry overcame previous economic shocks by focusing on what they could control, gaining a deeper understanding of their businesses, and taking progressive steps to improve the efficiency and sustainability of their operations. Data shows UK manufacturers have digitised faster than other parts of the economy and achieved productivity gains that exceed those in other major manufacturing economies.
“Through our work, we see manufacturers achieving output capacity and productivity gains in just a few months that can offset cost increases and the decline in headcount. The improvements achieved through data and digitisation provide a competitive advantage in export markets, and alongside efforts by businesses to reshore production and secure their supply chains, can help manufacturers capture a larger share of the domestic market as well.
“I hope the Government’s commitments to advanced manufacturing, clean energy, defence, aerospace, automotive, life sciences, and medical devices materialise into contracts and collaboration opportunities for UK manufacturers. Manufacturers that get their house in order during the tough times will be more resilient in the moment, but also better prepared to respond to new opportunities in the future.”
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