UK manufacturing sector: a reality check

It is distressing every time the press speak of a post-manufacturing economy, thereby contributing to a general feeling of decline. Yes, manufacturing accounts for roughly 17% of the economy according to national statistics which is not much below the EU average. However, this is still around £200bn per annum. And although many sectors are currently in recession, some of Britain’s major and highest technology sectors are still thriving even in today’s difficult economic climate: aerospace, defence, space, pharmaceuticals and so on.

The sector directly employs 3.6 million people and provides half of all the exports with which we pay for our imports. Moreover, a large percentage of the "shrinkage" is due to re-classification, rather than to actual decline. Fifty or 100 years ago, the following activities were often run by manufacturing companies and therefore considered part of the sector:

• Accounts and bookkeeping
• After-sales support and maintenance
• Assembly and sub-assembly work
• Call centres and other sales activities
• Canteens and catering
• Cleaning
• Housing for workers
• Human resources: large parts of the recruitment process, management of benefits, health care
• Information Technology (in the olden days, the equivalent of this would be management of leading edge equipment and services internal to the company)
• Maintenance and overhaul of in-house equipment, including calibration, modifications and upgrades
• Marketing
• Project and programme integration and management, e.g. nowadays a consultant often pulls together elements from many different manufacturers to complete the entire project; in the olden days one company not only did it all but managed the process of pulling it together
• Retailing
• Research and development
• Security
• Stock holding and ordering
• Transport ownership and management
• Treasury and other financial functions
• Warehousing and distribution
• Work study / consultancy

This is not an exhaustive list, but long enough to illustrate the point. Huge swathes of these have now been out-sourced to other companies, which are classified as being in the service sector. This out-sourcing does not actually reduce the real value to the country of manufacturing: it only reduces the statistical representation of that manufacturing. These parts of the service sector depend totally on the manufacturing sector for their work, so the importance of the manufacturing sector has only declined inasmuch as the (mainly financial) services sector has out-grown it.

Manufacturing industry in the UK is a vibrant and strong part of the economy. The list of manufacturers, major and minor, known and unknown, long established or start-up, traditional or new, is immense. Can we change our attitudes to manufacturing and engineering?

Because British manufacturing and technology still lead the world in many fields, they are increasingly coming to companies supplying specialist and high tech solutions such as Tekdata. As a result, Tekdata is now growing at 20% per annum and recruiting hard – another British manufacturing success story. Some major multinationals have already engaged Tekdata as their development partners in cabling, harnessing and related fields.

Follow this link to contact Mark Howitt and find out how you can benefit from working with Tekdata