Wales has seen a significant growth in the number of manufacturing jobs in the last year but skills shortages are holding the sector back.
The findings come in the Make UK/BDO Annual Manufacturing Outlook Report which shows that, in the twelve months to March 2024, the number of manufacturing jobs in Wales increased by 13,000. By contrast, every English region saw a fall in manufacturing jobs in the same period with the East of England being the only region showing a slight rise. This meant the manufacturing sector saw an overall fall of 34,000 jobs in the twelve months to March.
According to Make UK, the increase in Wales is likely to have been driven by the significant supply chain in the Aerospace & Defence sectors which have seen strong growth in the last year amid a large number or orders for new aircraft and increased defence spending. The Transport Equipment sector – mainly aerospace – accounts for 15.5% of manufacturing in Wales, the largest sub sector.
The pressure on finding skilled people is still severe as 64,000 vacancies remain in the manufacturing sector, accounting for some £6 billion per annum in lost output, according to new analysis by Make UK. In response it is urging the new UK Government to make tackling skill shortages and reforming the technical education system the centrepiece of its forthcoming industrial strategy.
Verity Davidge, Director of Policy at Make UK, said:
“Industry remains critical to the growth of the economy, providing high value, high skill jobs and aiding the process of creating wealth across the UK. The new Government has made a welcome bold statement of its intent to tackle the UK’s anaemic growth at national and regional level. It should now back this with a radical, cross-government, long-term industrial strategy which has measures to tackle the UK’s acute skills crisis at its heart. This mission critical vision should be allied with local growth strategies and the priorities of each region, including infrastructure and innovation, together with other measures to ensure the UK is now fully open for business.”
Richard Austin, Head of Manufacturing at BDO added:
“Over the last few years, manufacturers across the regions and nations have faced multiple external shocks and changing policy priorities. They have shown great resilience in overcoming these challenges. There is now an exciting opportunity for the sector to work with the new Government on the development of a new long-term industrial strategy. This could help address longstanding skills shortages, boost infrastructure, improve productivity and unlock vital investment to help drive economic growth and prosperity.”
The report highlights the importance of manufacturing to regional economies with every area in the UK, except for the South East & London, seeing an above average contribution from manufacturing to its local economy. In Scotland the number of manufacturing jobs increased by 10,000 in Scotland while in Northern Ireland the number was 2,000. In Scotland, the increase is likely to have been driven by the growth of renewables investment, especially offshore wind.
The survey also shows that every region and nation has returned output above pre-pandemic levels apart from the West Midlands due to the downturn in the automotive sector and the transition of supply chains to electric vehicle production.