Region’s manufacturing sector has ‘weathered the storm’, says new report

Charlotte Horobin

A new report out today (July 19) from Make UK, the manufacturers’ organisation, and accountancy and business advisory firm BDO shows that manufacturing “remains central to the success” of the East Midlands, with the sector accounting for 16% of the region’s economy – above the national average of 10%.

According to the report, which analyses the overall status of industry in the region over the last 12 months, the East Midlands has been hit hard like other UK regions by Covid. However, the sector has seen a strong recovery emerge since the start of the year, with output and order levels the highest of any UK region.

Meanwhile, both investment and job prospects have improved significantly since the turn of the year as firms hire to meet increased demand.

Three sub-sectors account for almost half of regional manufacturing output. Food and drink remains the biggest manufacturing sector in the region accounting for almost a quarter of output (22.6%), followed by transport equipment (13.7%) and rubber and plastics (10.2%).

The East Midlands also continues to be a strong export performer, accounting for 7% of total UK manufacturing exports. The EU is the region’s main export destination (48%) followed by Asia & Oceania, which at 24% is a significantly higher exposure than other UK regions. North America is the third largest market, accounting for 14% of the region’s exports.

Charlotte Horobin, region director for Make UK in the Midlands, said: “The report shows that industry continues to have a central role to play in the success of the East Midlands 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.”

Jon Gilpin, head of manufacturing at BDO in the Midlands, added: “The East Midlands has a rich and diverse manufacturing base that is a large contributor to our local economy, employing more than a quarter of a million people in the region.

“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.”