House of Commons Library

Manufacturing: statistics and policy

Published Tuesday, January 2, 2018

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 2016 manufacturing in the UK accounted for:

  • 8% of jobs, 2.7 million in total
  • £177 billion of economic output, or 10% of the UK total
  • 57% of imports, worth £243 billion
  • 70% (£15 billion) of UK research and development spending (2015 figures).

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 could have a major impact on the manufacturing industry. For example, changes in the trading relationship between the EU and UK could increase the complexity of trading with European countries, but the ability of the UK to negotiate trade deals with third countries could help open markets that are currently unavailable to UK manufacturers.

Issues such as investment, supply chains and access to skilled labour after Brexit will also have an impact on manufacturing.

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 'challenges' for industry.

Commons Briefing papers SN01942

Author: Chris Rhodes

Topics: Economic policy, Industry, Manufacturing industries

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