Make UK publishes its first quarter manufacturing outlook
Published: 27 March, 2024
Make UK has published its first quarter manufacturing outlook and revised economic forecasts recently which threw up some interesting findings.
At a headline level the results were mixed, with anaemic growth forecast for the sector in the next two years in the face of a flat UK economy and weak conditions in overseas markets, especially in Europe where Germany is in recession. However, despite this, confidence levels among companies remain robust, with investment and recruitment intentions holding up.
However, what was most striking is that, while the overall picture is weak, it masks stark sectoral and regional imbalances. Electronics, aerospace and food and drink are powering ahead, whilst the South East and Wales are performing substantially better than other regions and devolved Nations.
This highlights that there is now a direct link between sectoral and regional performance, as electronics and food and drink are the largest and second largest sectors respectively in the South East, while Wales has a very large aerospace supply chain.
According to Make UK, these imbalances for both sectors, Nations and regions are now becoming permanent, with the strong performance of manufacturing in the South East yet further evidence that levelling up is failing to address regional economic imbalances.
Given the rate at which industry is accelerating its use of digital technologies the electronics sector is set to grow even faster while food and drink is the biggest manufacturing sector, accounting for 14% of total manufacturing output. With the investment in cleaner and greener aerospace travel, not to mention the current huge order books for new aircraft and a very likely increase in defence spending the aerospace sector is also likely to see continued significant growth. Wales in particular is likely to benefit from the growth in aerospace given its large supply chain and the fact manufacturing overall accounts for a fifth of the Welsh economy, the highest percentage of any UK devolved Nation or English Region.
Looking forward, these imbalances are going to be a major challenge for the next Government of whatever colour as part of any industrial strategy.
https://www.linkedin.com/company/makeuk/
