Even though the UK is the birthplace of the industrial revolution, the manufacturing job loss statistics are not looking up. The leading causes are the coronavirus pandemic and Brexit. While the food industry is still operating, the aerospace and automotive sectors saw a decline in orders. This resulted in increased job losses.
Still, with its Job Retention Scheme, the UK government is working hard to help employers retain and pay workers. The manufacturing industry still needs that support, but 44.3% of manufacturers don’t have workers on furlough. The UK remains among the top 10 global leaders in manufacturing but still has a long way to go before it beats countries like China and the US. Read on to learn more.
Considering the pandemic and the disaster it brought upon the UK economy, the manufacturing industry is still holding up. The average wage is 13% higher than in other industries, and the UK is still on the list of the top 10 manufacturers globally.
According to the latest manufacturing sector statistics, the manufacturing sector accounts for £191 billion of output, which is a 7% growth in the last five years. 46% of UK goods were exported to EU countries, totalling £169 billion.
Based on employment in manufacturing data, the jobs created by the manufacturing industry totals to 2.7 million, and the average wage is £34,538, which is 13% higher than in other sectors.
UK manufacturing statistics show that the country is still on the list of the world’s top 10 manufacturers. The food and drink sector remains the biggest sector, followed by transport and pharmaceuticals.
The latest UK manufacturing sector statistics show that the manufacturing output decreased by 9.9% in 2020, which was 8.1% more than in 2019.
Even though the manufacturing industry in the UK has grown, significant job losses happened across industries. The pandemic affected the number of manufacturing jobs and left many people unemployed. Manufacturers are so uncertain about the future that some even stopped hiring apprentices.
Almost half of UK manufacturing companies decided not to hire apprentices. For comparison, 74% of companies hired apprentices last year. This figure is worrying since apprentices are essential to UK manufacturing employment statistics.
Not investing in training the labour force can negatively affect the economy’s future.
According to manufacturing job numbers, more than half of companies plan to make job cuts in the next six months. Aerospace, automotive, and other essential industries have prepared for the lack of demand due to the coronavirus pandemic.
Automation increases productivity, cuts costs, but also makes employees redundant. Since 2000, around 1.7 million jobs have been lost to robots. More precisely, 550,000 manufacturing jobs have been lost to robots in China, followed by 400,000 jobs lost in Europe and 260,000 jobs lost in the US.
Coronavirus hit the UK economy hard. The loss of manufacturing jobs in some industries is at an all-time high, but 42% of businesses expect things to get back to normal within the next 12 months. At the moment, only 15% of companies are operating at full capacity.
The effects of the pandemic will still be visible in 2021. The number of job losses in the UK is predicted to grow to 2.6 million. The UK government claims that the economic emergency has just begun. It also plans to spend billions to help the country get through the coronavirus crisis.
Since August 2020, the Coronavirus Job Retention Scheme has helped 74,800 manufacturers to protect their workers. The Job Retention Scheme provides grants to employers to pay 80% of wage and employment costs per month, totalling £2,500 per employee.
Job Retention Bonus is another essential part of the Scheme. Employers get £1,000 for every worker they keep employed by January 31, 2021. These, and many other schemes, are supposed to help restore manufacturing jobs lost to the pandemic.
According to manufacturing jobs statistics, 44.3% of manufacturers have no staff on furlough while 38% have 1–10% of employees on furlough. Only 0.5% of manufacturers have all staff members who are on furlough.
It’s not only COVID-19 that affects the number of employed. 1.5 million people are at risk of losing their jobs because of automation across industries. When it comes to manufacturing, almost 90% of UK manufacturers agree that smart factories could improve efficiency.
Automotive, aerospace, and chemical industries are some of the essential industries in the UK. Unfortunately, they suffered many job losses. Still, a significant UK manufacturing decline could happen across other industries as well, depending on how long the pandemic lasts.
(McKinsey & Company)
The number of jobs at risk depends on the industry. Accommodation and food services are at 68%, with 73% of employees on furlough. The retail and wholesale sector has the most jobs at risk, totalling 1.7 million. Manufacturing has a 17% risk, with 31% of employees on furlough.
Manufacturing job losses happen across various industries in the UK, and the automotive industry is no exception. The Society of Motor Manufacturer and Trades claims that 11,000 lost jobs are just the tip of the iceberg and that more jobs will be lost in the future. However, the total number is hard to predict as the impact across sectors is uneven.
The coronavirus proved to be detrimental to the aerospace industry. The collapse in the travel industry resulted in only 13 aircraft orders in July and August 2020. This is the lowest number of orders for new aircraft. Furthermore, 12,000 people have already lost their jobs in the aircraft manufacturing sector or are about to become redundant.
(The New York Times; Ready for Brexit)
When it comes to manufacturing jobs in the chemical industry, the numbers might go down, but not because of COVID-19. The new Brexit trade deal could have a huge effect on the chemical industry and its employees. The deal brings new costs and regulations, resulting in a drop in exports and margins and more job losses in the sector.
Recent manufacturing job loss statistics show that the impact of coronavirus on UK manufacturing increased job losses. Companies had to put many workers on furlough, but luckily the Job Retention Scheme served its purpose.
The overall sentiment is that businesses will return to normalcy in the following year. However, the unemployment rate in the UK is expected to reach 2.6 million by mid-2021. The government will fight hard to keep the economy running and invest billions in various relief schemes.
Manufacturing jobs, in general, didn’t drastically decrease until the pandemic. Even when it happened, some sectors had to stay in operation. The chemical, automotive, and aerospace industries suffered the highest number of job losses.
The number of lost jobs in manufacturing depends on the industry. 12,000 people have already lost their jobs or will do so in the aircraft manufacturing sector. The number of employed in the automotive sector could go higher than 11,000.
Automation could cause 1.5 million people to lose their jobs, which is about 7.4% of the jobs in England. Waiters, shelf fillers, bar staff, and similar occupations are at the highest risk. Automation could also easily find its place in the automotive and similar industries.
Despite the pandemic, the UK manufacturing sector is still keeping the UK among the top 10 global leaders. The decline in the manufacturing sector happened due to market loss, exhaustion of raw materials, and the use of machines. Automation is contributing to the manufacturing job loss statistics since more businesses are replacing people with machines.