Manufacturing ‘vital’ to West Midlands as sector recovers from Covid

Manufacturing remains “vital” to the success of the West Midlands with the sector accounting for 15% of the region’s economy, significantly above the national average of 10%, a report out today says.

According to the report from Make UK, the manufacturers’ organisation, and accountancy and business advisory firm BDO, like all UK regions the West Midlands was hit hard by Covid, especially the immediate impact on the automotive sector and its supply chain.

However, since the second half last year, and especially the start of this year as car production has grown at pace, the region has seen significant growth.

Over the last year, the West Midlands has been the UK’s best performing area in terms of output.

The three biggest sub-sectors account for almost two thirds of regional manufacturing output with transport equipment, largely automotive, accounting for more than a third (35.2%) of all regional manufacturing output. This is followed by metal products at 14.9%, and then the machinery equipment subsector at 11%.

The West Midlands remains an important export performer and accounts for 8% of total UK manufacturing exports. Exports to the EU are at 46% of the regional total. This has increased slightly in the last year, however they are still below the national average of 48%. This is followed by North America at almost a quarter (24%) of West Midlands’ exports and Asia & Oceania which accounts for 17%.

Charlotte Horobin, region director for Make UK in the West Midlands, said: “The report shows that industry continues to have a central role to play in the success of the West 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 West Midlands has a rich and diverse manufacturing base steeped in history. The sector is a large contributor to our local economy, employing almost 300,000 people and accounting for over 15% of the region’s economy overall.

“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.”