Large parts of UK manufacturing are not only defying the economic slowdown, but outperforming the rest of the economy and growing at breakneck speed according to a new report by EEF, the manufacturers’ organisation and business advisers BDO Stoy Hayward.
The report ‘Modern Manufacturing – The High Performers’ contains new analysis revealing the top twenty high performing sectors in UK manufacturing.
It highlights the strengths of manufacturing in the UK and paints a picture of diversity and vibrancy, from aerospace to pharmaceuticals.
The research shows not only are many parts of manufacturing high-performing, but some sectors are reporting stronger growth rates than their equivalents in France and Germany.
The analysis also adds weight to evidence that manufacturers are reaping the benefits of growing world trade by adopting a range of strategies for success.
These include technology-driven responses to globalisation, in addition to innovations in process, design and services.
Peter O’Grady, head of representation for EEF West Midlands, said: “This report is the final nail in the coffin of the myth that manufacturing is in decline.
“The reality is a dynamic, innovative and increasingly high value sector that is competing successfully across the globe. What is especially notable is the diversity of activities that are thriving.
“Alongside the well-known success stories of aerospace and pharmaceuticals, are sectors producing scientific instruments, mechanical appliances and basic metals – which also have shown strong growth and have a solid international reputation.”
Tom Lawton, head of manufacturing for BDO Stoy Hayward in Birmingham, said the analysis showed there was “no one winning formula” for high performance in a relatively high cost location like the UK.
“The sectors that have succeeded in recent years have adopted a range of strategies that make them stand out internationally, including: scientific innovation and knowledge, a focus on customer value and the development of customer facing service offerings,” he said.
Mr Lawton said what the majority of the thriving sectors shared was a focus on exports, which showed how manufacturers had turned globalisation to their advantage.
“For two fifths of them, exports now account for more than half of their turnover. Trade is hugely significant to high growth manufacturing, particularly in the emerging BRIC (Brazil, Russia, India and China) economies which have seen strong growth in recent years,” he said.
“This demonstrates the responsiveness of UK manufacturing to a range of markets – new and old. Agility is key to success in the current marketplace.”
Nine sectors have outperformed the manufacturing average over the last five years, together accounting for almost 60 per cent of UK manufacturing output. Especially strong growth can be seen in other transport equipment, mechanical equipment, medical and precision instruments, other non metallic equipment and recycling, which have expanded between four and ten times the average.
As well as highlighting the pace of growth, the report shows the diversity and size of the high performing sectors. There are a small number of large sectors in the top 20 with aerospace and pharmaceuticals alone accounting for a tenth of output.
But other sectors in the list are much smaller but growing very quickly, highlighting the evidence that companies operating in niche sectors can be highly successful.
It concludes that in a fast changing global market, adaptability and speed of response may now be more important than scale.