A new report from EEF, the manufacturers’ organisation, and accountancy and business advisory firm BDO LLP shows that London & the South East is the largest regional manufacturing economy in the UK, with a corresponding increase in jobs since 2010.
According to the EEF/BDO Regional Manufacturing Outlook report, the region accounts for 16.2% of the UK’s total manufacturing output and employs almost half a million highly-skilled people.
Whilst the dominant service sector means that manufacturing remains a small part of the whole London & South East economy overall (just 4% of total workforce), both the number of companies and jobs in the manufacturing sector are continuing to increase.
Over the past five years, the London & the South East has consistently been one of the best performing UK regions, outperforming the UK average in all key indicators regularly. The latest 12 months has seen this trend continue with the region arguably the star performer, recording the highest average output and orders balance across the UK, and backing this up with solid recruitment activity.
London and the South East’s strong activity has been underpinned by the high degree of manufacturers that serve the domestic and consumer-orientated food and drink sector, as well as the export-focused aerospace sector, which has excelled on the back of strong global demand.
The South East also continues to be a strong export performer, accounting for almost a quarter of total UK manufacturing exports – the biggest of any UK region. The region depends slightly less than other parts of the UK on exports to the EU, with the rest of the exports split equally between Asia and Oceania and North America.
Commenting, Jim Davison, Region Director for EEF in the South East, said:
“The report shows that industry continues to have an increasingly vital role to play in the South East. The last year has seen a strong performance with lofty heights being reached in the second half of last year and it is no surprise to see some easing back in the first half of 2018.
“There are well documented challenges going forward, not least those facing the automotive and construction supply chains. Furthermore, the progress of Brexit negotiations has the potential to be a factor in the future performance of manufacturers in the South East. Despite this, those companies that invest and innovate will still have the best long-term prospects and can contribute to raising the productivity performance of the region and the UK as a whole.”
Kevin Cook, partner and head of manufacturing at BDO in the South East, added: “Local manufacturers have delivered another strong performance. Manufacturing is a real powerhouse sector for our regional and national economy, creating jobs and opportunities in both domestic and international markets. However, it is crucial the government delivers a long-term, practical Industrial Strategy to ensure a positive trading environment for businesses post-Brexit. Importantly, this will give firms the confidence to continue to invest in automation and digitisation, which is so important to the future success of UK manufacturing.”
