Growing regional divide in UK manufacturing

Manufacturing industries in London and South East England are “booming”, with growth far outstripping any other UK region, according to a new survey.

New study finds a growing North-South divide in UK manufacturing.

David Sapsted

2 January 2020

Conducted among more than 300 firms by the manufacturers' organisation Make UK and business advisory company BDO, the Regional Manufacturing Outlook survey for 2019 Q4 found that while the UK-wide balance for total orders is +6 per cent, it stood at 21 per cent in London and the South East.The difference was even starker for domestic orders (+30 per cent compared to a national average of -5 per cent) and also for export orders (+39 per cent compared to +10 per cent)."This divergence was also reflected in employment prospects, with intentions to recruit by London and South East manufacturers at a balance of +26 per cent compared to a national average of +6 per cent," says Make UK.

North-South manufacturing divide

The report pointed out that London and the South East is already the second-largest manufacturing region in the UK, just behind NW England, employing more than 400,000 people and worth £28.1 billion a year."It is benefiting from the global growth in investment in new technologies linked to the fourth industrial revolution, such as robotics and artificial intelligence, a pattern which is only expected to increase," says Make UK.By contrast, the survey showed that the West Midlands, in particular, was suffering acutely from the problems in the automotive sector, with all six of the survey indicators in negative territory.

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Seamus Nevin, chief economist at Make UK, says, “There is now a clear two-speed economy in manufacturing performance, with London and the South East at full speed, while some other regions are stuck in first or second gear.“While there are a number of global factors impacting on the performance of some regions, industry will support the new Government in any drive to boost growth and investment across all UK regions.”

Government support needed for industry

Tom Lawton, head of manufacturing at BDO, adds, “The old north-south divide is unfortunately still very much in play when it comes to industrial performance. Industry will be keen to see the new government promote investment, skills and employment across the whole of the UK to rebalance growth.“Currently, some sectors such as automotive are also facing a potent combination of structural factors that are posing great challenges for those companies and supply chains who depend on them. As part of efforts to spread growth more evenly, it’s essential that policies are put in place to safeguard the regions where these key sectors are so important to their prosperity.“Manufacturers will hope the start of a new decade and a fresh government will secure a renewed focus on delivering a long term, modern industrial strategy to ensure industry can be at the forefront of tackling the societal and technological challenges we face.”