Advanced Manufacturing and Engineering
Advanced Manufacturing and Engineering
UK market
According to the UK Government’s Department for International Trade, the UK has a
thriving manufacturing industry, with investment in automation and technological
advances potentially adding £275bn to the national economy each year.
Substantial UK growth has occurred in areas such as composite materials, low carbon
technologies, digital process engineering, additive manufacturing, and robotics and
autonomous systems. The UK is also a world leader in material technologies and the
development of advanced materials such as graphene and other 2D materials. New
technologies are set to transform productivity in the next few years, a process referred to as
the 4th Industrial Revolution or Industry 4.0. The World Economic Forum considers the UK a
leading country for Industry 4.0 – ranked 2nd for technology and innovation, and 1st for
available financing.
Optimism in the three months to April (2021) improved at its quickest pace since April
1973, while investment intentions saw a strong, broad-based rebound, according to the
latest CBI quarterly Industrial Trends Survey. The survey of 288 manufacturers found that
firms expect to increase capital expenditure on buildings, plant and machinery, product and
process innovation, and training and retraining in the next year (relative to the last). In
particular, investment intentions for plant and machinery were at their strongest since July
1997. Although manufacturing output was broadly flat in the quarter to April, total new
orders grew at the quickest pace since April 2019 – and both output and orders growth are
expected to pick up rapidly in the next quarter. Export optimism for the year ahead
strengthened after successive decline over almost three years. New export orders stabilised
after falling for nearly two years and are expected to hold steady in the quarter ahead.
Worth £5.2bn and accounting for 81,300 high-value jobs (according to official statistics -
see Table 1 above), Leicester and Leicestershire has the 7th highest specialism in advanced
manufacturing and engineering in England (ranked by location quotient out of 38 LEP
areas).
Recent growth has been employment-led, with 3,300 additional jobs created since
2010. Accompanying productivity growth however has been subdued, contracting by 1%
p.a. (2.5 times slower than the UK average), pulling down headline GVA growth (-£240m).
Resultantly, productivity in the sector has dropped 8% below the UK average. At the
start of the decade, sectoral productivity in the LLEP area had been in line with the UK
average. This gap is estimated to be costing the sector some £400m of potential growth.
Source: ONS, Cambridge Econometrics. Note: Size of bubbles relate to size of activity (in jobs
terms). Bubbles above the blue horizontal indicate a specialism. Bubbles to the right of the blue
vertical indicate growth (in jobs terms).