A new report out today from Make UK, the manufacturers’ organisation, and accountancy and business advisory firm BDO LLP shows that manufacturing is growing in importance to the success of the East Midlands economy, with the sector accounting for 16.4% of the region’s economy in 2022 (an increase from 15.9% in 2021), way above the national average of 10%.
The report also shows an increase in 7,000 jobs in manufacturing in 2022 compared to 2021, up to 265,000.
According to the report, which analyses the contribution of manufacturing to the East Midlands economy, the East Midlands was also the best performing UK area in terms of increasing its output in the last twelve months according to Make UK and BDO data. This is largely down to the strong recovery in the aerospace and automotive sectors which were initially slower to recover from the pandemic.
Three subsectors account for almost half of manufacturing in the East Midlands. Food and drink remains the biggest manufacturing sector in the region accounting for almost a fifth of output (19.1%), followed by transport equipment (14.6%) and rubber and plastics (11.5%).
The East Midlands also continues to be a strong export performer, accounting for 7% of total UK manufacturing exports, a slight increase from 6% in 2021. The EU is the region’s main export destination where its dependence has decreased (49% from 51%) followed by Asia & Oceania, which at 25% (up from 22%) is a significantly higher exposure than other UK regions. North America is the third largest market, accounting for 14% of the region’s exports.
Chris Corkan, regional manager for Make UK in the Midlands, said: “Industry remains critical to the growth of the East Midlands economy, providing high value, high skill jobs and aiding the process of levelling up. To build on this position we need a national industrial strategy which encompasses local growth strategies which fit with the priorities and strengths of the region including infrastructure, innovation and skills in particular.”
Jon Gilpin, head of manufacturing at BDO in the Midlands, added: “The growth in manufacturing output and jobs that we’ve seen in the East Midlands over the last year is testament to the resilience of the sector across the region.
“Local manufacturing companies have had to overcome the multiple challenges thrown up by Brexit, shortages in skilled labour, pandemic-related supply chain delays and the huge energy price rises we have seen following the Russian invasion of Ukraine.
“While everyone is hoping for some respite, the headwinds show no sign of abating. With high inflation and interest rates continuing to rise, manufacturers will need to remain alert, responsive and resilient in the face of any future geopolitical or economic shocks.”
