Industry eyes 15 per cent GDP target for UK manufacturing

News

The UK manufacturing sector is calling for government support as it seeks to grow its share of GDP from 10 per cent to 15 per cent.

Adobestock

In a brief report released to mark the UK’s first ever National Manufacturing Day, MakeUK claimed that increasing industry’s contribution to GDP would add £142 billion to the UK economy, as well as help the regions to level up – ostensibly a cornerstone of government strategy. MakeUK found that 90 per cent of manufacturers supported establishing an overall national target for industry growth, though 75 per cent were unaware of the ‘Plan for Growth’, announced earlier this year as a replacement for the government’s Industrial Strategy.

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“Government has already identified manufacturing as a growth sector and has done much to support it, firstly through incredibly challenging environment of the pandemic and with a series of measures to help the sector bounce back as trade started to normalise,” said Stephen Phipson, CEO of Make UK.

“However, to further tap into the growth, agility and resilience Britain’s manufacturers have shown over the last two years, imaginative solutions are needed to make sure the full potential is reached. It is not an overly ambitious target to say that manufacturing can grow to deliver 15 per cent share of UK GDP, but government does need to help companies be confident enough to make big investment decisions by helping with some key incentives such as making the Annual Investment Allowance increase permanent and expanding the R&D tax relief scheme to include capital expenditure.”

Over half of companies (52 per cent) said they are planning to grow their business by over 20 per cent in the next five years. Around a quarter (24 per cent) intend to expand their business by up to 20 per cent and almost one in five (18 per cent) have plans to grow up to 10per cent.

When MakeUK asked manufacturers to pick the top three initiatives to help them grow their business in the next five years, companies put incentives for investment top of the list, with investment in apprenticeships second and stronger local industrial strategies coming in third place. Greater support for exports was also seen as key, alongside greater power for regional leaders making good local decisions for business.