Manufacturing has a particular importance to the economy, which needs to be better understood. Two recent reports are especially relevant to this.
In The True Impact of UK Manufacturing (2018), commissioned by the Manufacturing Technologies Association (an EAMA member), Oxford Economics explains that the sector accounts, directly, for 9% of the UK’s GDP. But is only part of the story. It also accounts for a further 6% in indirect, supply chain, impact; and another 8% in induced, worker spending.
In total, UK manufacturing supported a total GDP contribution of £446 billion and supported a total of 7.4 million jobs (in 2016).
The Institute for Manufacturing at University of Cambridge developed the argument further in Inside the Black Box of Manufacturing (2019). This report showed that not only is some manufacturing itself high-value, but that many high value activities and services, from upstream research and development to downstream marketing and logistics, depend on it.
In practical terms, three other reasons can be identified as to why manufacturing is especially important:
- It operates in competitive international markets. If a manufacturing firm closes, tax revenues, jobs and value are often lost to the economy. In many other sectors, that is not the case.
- It creates highly skilled jobs, raising standards of skills and understanding across the economy. Manufacturing jobs also pay more than the average.
- It ensures the UK has the ability to develop, make and supply the things we need – which we can also supply to trading partners around the world.