House of Commons Library

Manufacturing: statistics and policy

Published Friday, January 10, 2020

Data on the manufacturing sector, analysis of recent trends and pressures facing the sector, a summary of government policy and a discussion of the potential impact of the UK’s decision to leave the European Union.

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Manufacturing statistics

In 2018 manufacturing in the UK accounted for:

  • 8% of jobs, 2.7 million in total
  • £191 billion of economic output, or 10% of the UK total
  • 42% of UK exports, worth £275 billion
  • 65% (£16 billion) of UK research and development spending.

Trends

Manufacturing trends

Over the past 30 years, the value of manufacturing output has remained largely the same, but the number of people employed in the industry has fallen significantly.

These trends partly explain why productivity in manufacturing has (until recently) grown more quickly than productivity in the whole economy.

Since the late-1990s, imports of manufactured goods have grown more quickly than exports. This means that the manufacturing trade deficit has widened over this period.

The impact of Brexit

The UK’s decision to leave the EU has already had an impact on the manufacturing industry, and the nature of the new trade deal between the UK and the EU will also impact manufacturing firms. Manufacturing trade associations have welcomed the Withdrawal Agreement that was agreed in October 2019, with some notes of caution.

Some manufacturers are concerned about issues such as future investment, the operation of cross border supply chains and access to skilled labour after Brexit.

Policy

The government’s industrial strategy was published in November 2017 and includes a number of policies designed to help manufacturing, including a number of sector deals and Grand Challenges for industry.

Commons Briefing papers SN01942

Author: Chris Rhodes

Topics: Economic policy, Industry, Manufacturing industries

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