UK Manufacturing Output Surpasses Pre-COVID Levels

UK Manufacturing Output Surpasses Pre-Pandemic Levels Across All Regions

For the first time, every English region and the three devolved nations have reported manufacturing output that exceeds pre-pandemic levels, according to a significant new report from Make UK and BDO. The 2024 Regional Manufacturing Outlook showcases a robust comeback in industrial performance, largely fueled by growth in the aerospace and defense sectors.

This annual report dives into official statistics that cover output, employment, sector strengths, exports, and trade patterns throughout the UK. The latest data available, up to the end of 2023, shows that all regions have now surpassed their 2019 output levels.

Regional Growth Highlights

Leading the charge in recovery, the South West has seen manufacturing output soar more than 27% above pre-pandemic levels. Close behind are the East of England at 21% and the North West at 20%. The growth in both the South West and North West can be linked to heightened activity in the aerospace and defense industries—key subsectors that account for 25.8% and 23.5% of regional output, respectively.

Moreover, the North West has also enjoyed a rebound in automotive production, bouncing back from earlier pandemic-related setbacks.

Expert Commentary

Fhaheen Khan, Senior Economist at Make UK, shared:

“It’s taken some time and, some regions are striking forward at a faster rate than others, but hopefully the post covid malaise is now firmly in the rear view mirror. What this year’s report does show, however, is that we are likely to see a growing divergence between those regions and nations that have the sub sectors where greater levels of investment are taking place. In developing Local Growth Plans, many of which will see Advanced Manufacturing play a central role, Government must be mindful to ensure that growth is evenly spread.”

Richard Austin, Head of Manufacturing at BDO, added:

“The impact of the pandemic on the manufacturing sector can’t be understated. Having battled grounded flights, reduced demand and disrupted supply chains – to see manufacturing bounce back with such renewed force is a testament to the industry’s resilience and the strength of the regions they are working in.

“As these sectors pick up pace once again, they’ll need all the help they can get in order to maintain the UK’s position as a global leader. The industrial strategy is a good start but they’ll need continued investment in design, innovation, and skills across the whole of the country if they’re to weather global trade disruption.”

The report highlights that the impact of US trade tariffs isn’t felt equally across the board, with some regions facing more challenges based on their export profiles. The West Midlands, for instance, is particularly vulnerable, as a hefty 26% of its exports go to the United States, mainly in the automotive sector. The East of England (22%) and London and the South East (18%) also have notable shares of exports heading to the US.

On the flip side, exports to the EU are on a downward trend across all regions. Wales stands out as the most dependent on the EU, with a whopping 61% of its exports aimed at EU markets, although that’s a 10% decrease since 2020.

Manufacturing Employment Update

Despite facing some trade challenges, the manufacturing sector managed to add a net of 12,000 jobs in the year leading up to March 2024, bringing total employment in the sector close to 2.6 million. However, job trends varied quite a bit by region:

• Wales and the East Midlands both saw a drop of around 12,000 jobs.
• The West Midlands and East of England each gained just under 10,000 positions.

For more in-depth insights, check out the Make UK Regional Manufacturing Outlook.