Manufacturing Sector overview
Manufacturing contributes £6.7tr to the global economy. Contrary to common belief, UK manufacturing is strong with the UK currently the 11th largest manufacturing nation in the world. Manufacturing makes up 11% of UK GVA and 54% of UK exports and directly employs 2.6 million people.
Despite the decline since the 1970s, when manufacturing contributed 25% of UK GDP, the UK ranks second globally in aerospace manufacturing. In the half-year from January to June 2014, the UK-based car industry had its best year in new car sales in 9 years. 1.28 million new cars were sold during the period, a rise of 10% compared to the same period in 2013. While the chemical and pharmaceutical industries add £20m per day to the UK balance of trade. Underpinning these important statistics is an average annual productivity increase of 3.6% – two and a half times greater than the UK economy as a whole.
While the contribution of manufacturing to GDP has declined on paper, many of the services provided to manufacturers which would have once been considered part of manufacturing, such as catering, cleaning, building services, security etc, are now allocated into different areas of the economy. However, those contributions are directly reliant on manufacturing for continued business and could actually be considered as a part of manufacturing’s GDP input.