Make UK/BDO annual survey highlights vital importance of industry to South East as sector recovers from Covid

Matthew Sewell, Head of Manufacturing for the Central South and SW, BDO LLP

A new report out today from Make UK, the manufacturers’ organisation, and accountancy and business advisory firm BDO LLP shows that manufacturing remains vital to the success of the South East economy.

According to the report, which analyses the overall status of industry in the region over the last 12 months, the South East was hit hard by Covid but not to the same extent as manufacturing in other regions. As stated in the Make UK/BDO quarterly surveys, the region has seen significantly improved growth since the start of the year, with investment levels especially strong and way ahead of the national average.

The sector accounts for almost 5% of the South East’s economy – though given the domination of the services sector it is below the national average of 10% – and employs more people (428,000) than any other region.

The three biggest subsectors dominating regional manufacturing output are food & drink (15%), electronics (13%) and transport equipment (9.1%). Looking forward, the food & drink sector should see growth pick up significantly as restrictions are eased, though the shortage of semiconductors and other electronic components will continue to pose significant challenges for the electronics sector.

Despite its relatively small size compared to the services sector, manufacturing in the South East is a strong export performer. Exports to the EU are at 47% (slightly below the UK average of 48%), followed by North America and Asia & Oceania.

Commenting, Jim Davison, Region Director for Make UK in the South East, said:

“The report shows that industry continues to have a central role to play in the success of the South East economy. There are well documented challenges going forward, not least the major impact of Covid and the global economic downturn, the results of which are likely to be felt for some time to come.

“However, the region has clearly weathered the storm and, given the innovation we have seen over the last year, together with the acceleration of new technologies there are very positive signs for the future success.”

Matthew Sewell, Head of Manufacturing for the Central South and SW, added:

“Southampton and the wider Central South region has a rich and diverse manufacturing base that is a large contributor to the South East economy.

“Businesses were forced to rein in their investment plans and review their supply chains during the pandemic. Coupled with trade frictions as a result of Brexit, it’s been a tough year for the sector.

“It’s vital the Government smooths out critical issues such as customs procedures to avoid adding more layers of complexity and allow local manufacturers to build back stronger and better as we enter the second half of the year.”