Manufacturing growth in the South trailing devolved nations, finds Make UK/BDO

Manufacturing jobs are falling in the South of England – in fact, in every region bar the East of England – the latest Manufacturing Outlook Report from Make UK/BDO has revealed.

It comes as the devolved nations of Wales, Scotland and Northern Ireland all enjoy significant growth.

The South East & London has seen jobs in the sector fall by 3.1 per cent between March 2023 and March 2024, with a slightly less pronounced drop of 2.0 per cent in the South West.

That compares to 9.2 per cent growth in Wales – spurred by growth in the aerospace and defence supply chain – as well as 5.8 per cent in Scotland and 2.2 per cent in Northern Ireland.

However, despite the fall in jobs, the pressure on finding skilled people remains severe, as 64,000 vacancies remain in the manufacturing sector.

These account for some £6 billion per annum in lost output, says Make UK – which is urging the new government to make tackling skill shortages and reforming the technical education system the centrepiece of its forthcoming industrial strategy.

Verity Davidge, director of policy at Make UK, said: “Industry remains critical to the growth of the economy, providing high value, high skill jobs and aiding the process of creating wealth across the UK.

“The new government has made a welcome bold statement of its intent to tackle the UK’s anaemic growth at national and regional level.

“It should now back this with a radical, cross government, long-term industrial strategy which has measures to tackle the UK’s acute skills crisis at its heart.

“This mission-critical vision should be allied with local growth strategies and the priorities of each region, including infrastructure and innovation, together with other measures to ensure the UK is now fully open for business.”

Richard Austin, head of manufacturing at BDO, added: “Over the last few years, manufacturers across the regions and nations have faced multiple external shocks and changing policy priorities.

“They have shown great resilience in overcoming these challenges.

“There is now an exciting opportunity for the sector to work with the new government on the development of a new long-term industrial strategy.

“This could help address longstanding skills shortages, boost infrastructure, improve productivity and unlock vital investment to help drive economic growth and prosperity.”

The report also highlights the importance of manufacturing to regional economies, with every area in the UK (bar the South East & London) seeing an above average contribution from manufacturing to its local economy.

Meanwhile, every region and nation (bar the West Midlands) has returned output above pre-pandemic levels due to the downturn in the automotive sector and the transition of supply chains to electric vehicle production.