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    Assessing The UK Manufacturing Sector Essay

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    UK fabrication sector is a diverse sector that is based upon assorted industries, activities and engineerings. There are some developed industries in UK like drinks and nutrient, pharmaceuticals, aerospace and automotive and electronics industries. Furthermore some new industries are besides developing in UK like biotechnology, low C, digital and advanced stuffs and nano engineering. Overall UK fabrication sector now becomes a balanced sector that is seting its part in the development of UK.

    UK fabrication sector is at figure three in UK economic system in footings of UK GDP, after services and retail sector. In 2009 this sector has generated ? 140 billion of gross value added that is about 11 per centum of UK economic system. 2.6 million, persons are working in fabricating sector that is about 8 per centum of entire labour force of UK ( BIS, 2010 ).

    In the current study I have provided an in depth analysis of UK fabrication sector and its part in the economic development of UK. For the analytical intent I have used different tools like PESTLE and SWOT analysis that highlighted the demand of strong fabrication sector for the economic development of a state and I besides have provided the information of some weak sectors of fabricating due to some deficiency of accomplishments and other facets that cause for diminution in fabricating industry in some old ages for illustration UK ‘s Textile industry etc.Moreover I have provided some valuable information related with the part of UK fabrication sector in footings of supplying occupations, foreign exchange and gross value added.


    Two conflicting positions were ever at that place in the heads of peoples in relation to UK fabrication industry. Persons were comprehending from the last two decennaries that the new age will be for service industry so at that place should non be any demand to worry about fabrication sector and mills. Second point of position was that existent occupations were created by the mills and fabrication sector so with out fabricating sector workers can non acquire occupations and it will make economic jobs for British citizens. In 2003, UK fabrication industry was contributed 16 per centum to GDP and 13 per centum British citizens were employed at that place. It besides stand foring uninterrupted diminution of fabrication sector but until 2003 this sector has contributed 83 per centum of exports ( Ferguson, 2004 ). But after the recent recession this sector of economic system is sing roar.

    Specifying fabrication of United kingdom:

    UK fabrication sector is a diverse sector that is based upon assorted industries, activities and engineerings. This sector is coming at figure three in UK economic system in footings of UK GDP, after services and retail sector. In 2009 this sector has generated ? 140 billion of gross value added that is about 11 per centum of UK economic system. 2.6 million, persons are working in fabricating sector that is about 8 per centum of entire labour force of UK ( BIS, 2010 ). Harmonizing to SIC codification system of 2007 for industry statistics, fabrication sector is made up of following industries

    Beverage, baccy and nutrient merchandises

    Fabric merchandises

    Wood merchandises

    Paper and Pulp merchandises

    Printing and publication

    Petroleum, Nuclear and Coke

    Man made fibers and Chemicals

    Plastic and Rubber merchandises

    Non Metallic and Mineral merchandises

    Metallic elements and Fabricated metal merchandises

    Machinery and Equipment

    Optical and Electrical equipment

    Transport equipment

    Other fabrication

    Literature Review

    There is a long history of UK fabrication industry and this industry has ever produce good consequences of UK and contributed for the UK economic system. As discussed above that fabrication industry is composed upon different industries like drink, baccy and nutrient merchandises, fabric merchandises, wood merchandises, paper and mush merchandises, printing and publication, crude oil, atomic and coke, adult male made fibers and chemicals, plastic and gum elastic merchandises, non metallic and mineral merchandises, metals and fabricated metal merchandises, machinery and equipment, optical and electrical equipment, conveyance equipment and other fabrication ( BIS, 2010 ).

    We can state that there are different sub parts of UK fabrication industry but at the same clip these industries are dependent upon each others because batch of clip finished merchandise of one industry will go the natural stuff for another industry e.g. metal industry produces metal sheets but it will go the natural stuff for car and conveyance industry.

    Capabilities and strengths of UK fabrication industry:

    UK fabrication industry has different strengths and capablenesss and due to this one time UK was considered as the leader of industrialisation. Some of the capablenesss and strengths of UK fabrication industries are provided below

    Changed fortunes of fabricating industry of UK:

    Current globalization has changed everything and it has impact on fabrication industry every bit good. The fabrication of the current clip period is based upon technological invention, cognition, investing in intangibles and investing in accomplishments. As a consequence of current fabrication industry in the universe consumers are able to acquire better quality and sophisticated merchandises that helps to fulfill clients ( ABPI, 2010 )

    UK got specialisation in extremely proficient fabrication industries e.g. pharmaceuticals and aerospace every bit compared to the emerging markets e.g. Brazil, Chine, India and Russia that have specialisation in lowest proficient industries like fabric. Once a state addition specialisation in a peculiar industry so that state can keep that specialisation or competitory advantage for a long period of clip usually until that clip when new technological alteration came. After an in deepness analysis I came to cognize that UK have strong place in the industries such as organic chemical science, medical engineering and pharmaceuticals while it has weak place in electronics, information engineering and optics or nano engineering ( Arthur, 2009 )

    Advanced capablenesss of UK fabrication industry:

    Invention is geographic expedition of new thought successfully. Invention can be linked with constitution of new constructs, merchandises, engineerings, new designs, concern theoretical accounts direction patterns or organizational construction. The range of invention is much broader as research and development. Invention is linked with the constitution of latest engineerings, processes that can increase the efficiency and by spreading new constructs.

    The consequence of UK Innovative Survey of 2009 has showed that more than 70 per centum of UK fabrication houses are advanced particularly most of electronic and optical industry houses are extremely advanced ( ONS, 2010 )

    Furthermore the maximal research and developmental activities across UK are being financed by the concern and particularly by fabricating industry. In 2008 UK concern sector has spent ? 16 billion on R & A ; D and out of that ? 16 billion, ? 12 billion are financed by fabricating sector ( Swann, 2000 )

    Skills capableness of UK fabrication sector:

    Skills are helpful to better the public presentation and productiveness of the employees. If the house has skilled labors force than that house can react flexibly and innovatively for heightening competition, set uping and using new constructs that ends up in efficient procedures, better merchandises, better organizational constructions and better concern procedures.

    In the recent times workers want to better their accomplishments degrees so they are acquiring formal instruction for it due to this ground now labour force are more educated. In other words skilled work force can be a back bone of any organisation, In 1994 from the entire work force that has joined fabrication industry merely 9.7 per centum were keeping a grade but in 2009 this figure has improved and now 17.1 per centum of the workers have degree. The workers who are interested to fall in service sectors, research and development and selling and gross revenues field they ever hold degree and in 2009, 31.7 per centum of these worker hold degree. As workers who are interested in services and other profession prefer to keep degree this factor has consequence those workers every bit good who want to fall in fabrication sector to acquire degree before get downing their calling ( Technology Strategy Board, 2008 )

    Capabilities of UK fabrication houses to export:

    There is no specific standard to look into that if a state is involved efficaciously in planetary value but at least one tool which can give some kind of information is the per centum of companies that are selling into offshore markets. It is no uncertainty that there are some fabricating companies in UK who are truly making good in this industry e.g. auto fabrication in UK ( Vauxhall, Astra ) etc which is in the peep at this clip but on the other manus there are some industries who are severely worsening like Textile and Clothing industry of UK. This is the 9th biggest sector of UK fabrication. In 1997 this industry had a great roar, in 1999 5.1 billion of goods were exported but after that the entire end product starts decline bit by bit each twelvemonth due to different factors like higher exchange rates, deficit of skilled labor etc.

    Normally the houses that are involved into exporting concern they are large, productive, holding proficient cognize how and ever remain involved into research and development. These are some of the characteristics of those houses that involve in the export but it is non indispensable that all the houses that have these characteristics they involved in exports.

    Harris and Li ( 2010 ) have stated that bulk of the fabrication houses involved in export concern as compared to service houses. It means that good have more tradability as compared to services. Chemical houses, medical instrumentality and metal houses are supplying higher degree of foreign exchange to UK economic system as compared to other constituents of UK fabrication industry.

    As discussed earlier that the houses which are involved into exporting concern they ever involved into research and development every bit good as ever come up with innovate thoughts. Research and development and advanced activities help house to bring forth higher grosss and profitableness. Furthermore it will ensue in acquiring higher foreign exchange for the state.

    UK fabrication houses were confronting jobs from the last few old ages due to recession but now this industry is making good due to revenue enhancement alleviation that is offered by the authorities to UK fabrication houses. Furthermore the directors that are linked with the UK fabrication industry they know they strengths ( altering nature of UK fabrication, advanced capablenesss in UK fabrication, skills capacity of UK fabrication and capablenesss of UK fabrication to export ) and with the aid of this they can better their status every bit shortly as possible

    Competitive Analysis

    There are different methods to analyze the public presentation of different concern units, concern sectors and different economic systems of the universe. One of these analytical tools is PESTLE analysis that is stand foring by political, economical, societal, technological, legal and environmental factors ( Johnson, Scholes and Whittington, 2008 ). With the aid of PESTLE analysis I am able to analyze the current state of affairs of UK fabrication industry.


    Political factors:

    Factors that has an impact on political state of affairs or different political determinations that can convey any kind of alterations for the persons that are populating in a state can be covered under political factors. Most of the times when there is a political stableness in a state so it has positive impact on the citizens of that state and political stableness conveying approximately positive alterations for the citizens and every field of life. Critical factors that are linked with the political factors are support of authorities to governmental establishments, limitation upon net migration and security control within the state.

    Due to the recent recession in UK, fabricating industry was confronting different jobs. For the riddance of these hurdlings for UK fabrication industry the current authorities has launched different strategies to give some inducements to the fabrication industry e.g. Lord Mandelson in 2009 has explained that the authorities want to give revenue enhancement alleviation to all enterprisers who want to do investing in the fabrication sector of UK ( Peter, 2009 ). Furthermore Labour MP Richard Caborn explains that the authorities want to get down ? 1 billion National Investment Corporation for the development of fabricating sector of UK ( Rae, 2009 ). In this manner the sound political leading can back up the different sectors of the economic system so that these economical sectors will execute good in future

    Economic factors:

    Economic factors are the factors that are linked with economic conditions of a state. Major economic factors are growing rate, rising prices rate, involvement rate, unemployment rates and per capita incomes of the citizens.

    There are different economic factors that are linked with the growing of fabricating industry of UK. One of the chief factors is the higher salary and pay rates in UK as compared to other states and due to this ground most of the companies have shifted their works into different other states of the universe where the labor cost is less. In this manner employers are seeking to diminish the cost of production and increasing net income border. The best illustration is Vauxhall that has its auto devising works in Luton but it was near down in 2003 and it is merely involved in fabrication of different new waves of Vauxhall and the production of autos installation is transferred to Ellesmere Port. In 2006 Vauxhall has created problem to its parent company General Motors due to bettering efficiency and in 2009 General Motors has decided to sell off Vauxhall and Opel to Magna ( David, Zeleny and Vlasic, 2009 )

    Second major economic factor is revenue enhancement liabilities of the house. UK authorities is now acute to give some revenue enhancement inducements to the fabrication houses that are runing in UK to better their public presentation ( Peter, 2009 )

    Social factors:

    Social factors are those factors that are linked with that specific society in which the people ‘s unrecorded and common societal factors are norms, traditions, wonts and values of the peoples that are lived in a peculiar society.

    Social factors that are related with the fabricating industry of UK are gustatory sensation of the peoples to work with a peculiar industry. As explained earlier that from the last two decennaries British peoples have a perceptual experience that the coming age is of services industry and British peoples prefer to better their accomplishments for service industry as compared to fabricating industry but fabrication industry is the anchor of the economic prosperity of a state due to this ground now more peoples are coming toward fabricating industry ( Ferguson, 2004 )

    Technological factors:

    Technological factors are linked with the usage of latest engineering and technological promotion in a peculiar state. The companies which are utilizing latest engineering their productiveness is higher as compared to the companies that are non utilizing modern methods of production and latest engineering

    UK fabrication industry has the benefit of acquiring latest engineering and uses it in their fabrication units because UK has the long history of research and development and invention that is the cardinal factor for technological promotion. Furthermore UK has the basic substructure available for the technological promotion every bit good as they has skilled labors ( BIS, 2010 ). All these factors are considered as vital for the technological promotion and one time that substructure is available within the state concern sector can acquire benefit from it whenever and whichever manner they want

    Legal factors:

    Legal factors are related with doing new legislative assembly by the authorities for the state whenever it is required by authorities. Legal system of UK is considered as one of the best legal system of the universe. Government ever introduced new Torahs whenever any field of life need it for their easiness

    UK authorities ever make those Torahs that are helpful for the economic growing of the state. The best illustration is in 2009 when UK was in recession and the fabrication sector was non able to execute good at that clip the authorities has made amendment in the jurisprudence related with the revenue enhancement liability of the corporate sector particularly for the betterment of fabricating industry of UK and due to this now the fabrication industry is sing mini roar. That is how legal factors can be used to heighten the productiveness of a peculiar sector of economic system ( Peter, 2009 )

    Environmental factors:

    Persons are really much concerned about the environmental factors because now they have realized that industrial waste is a chief cause of pollution and that can damage and destruct the environment. Due to this ground persons ever criticise whenever they find any that a peculiar concern unit is non dispose off industrial waste decently.

    Furthermore there are Torahs and ordinances of different authorities sections that are adhering on concern units and whenever any concern unit is non following these regulations and ordinances they find punishments. Furthermore most of the fabrication companies are seeking to finish all their environmental liabilities because with out it they can non last in the long term. But most of the times fabricating companies are following all their duties because the direction of these companies know that it is their corporate societal duty and by executing corporate societal duty these houses can make softer image that will be helpful to them in long term ( Short, Keasey, Wright and Hull, 1999 )

    With the aid of PESTLE analysis I have explained most of the possible factors that have their impact on UK fabrication industry and now it is the responsibility of the top direction of these UK fabrication companies to work in line with these factors for bettering their public presentation

    In add-on to the PESTLE analysis, SWOT analysis is besides another of import analytical tool. SWOT is stand foring internal strengths and failing of the house every bit good as external chances and menaces that the house is confronting in a peculiar clip period. Now I am carry oning SWOT analysis for UK fabrication industry

    SWOT Analysis


    The strength that the UK fabrication industry has is that most of the educational and non educational establishments ever involve in research and development activities and fabricating industry can acquire profit from this research Deloitte ( 2009 )

    UK is an industrialised state and proper substructure is available at that place in the signifier of skilled labor, handiness of inputs and technological promotion. All these factors are pre-requisites for fabrication roar ( Gil and Haskel, 2008 )

    Manufacturing sector is still supplying occupation chances to at least 8 per centum of UK labour force. Overall 2.6 million peoples are linked with UK fabrication industry ( BIS, 2010 )

    Contribution of fabrication industry towards UK GDP in 2009 was ? 140 billion which is 3rd largest part after services and retail sector part in UK economic system ( BIS, 2010 )

    UK fabrication sector has the ability to bring forth the merchandises and export them to the international market. Even though in 2003 UK fabrication sector were able to bring forth 83 per centum of the entire UK exports ( Ferguson, 2004 ). This much higher exports in 2003 is the grounds that the fabrication industry of UK can bring forth higher sum of foreign exchange


    Labour cost is reasonably much higher in UK as compared to other counties and due to this batch of mills are reassigning from UK to other counties where the labor cost is relatively low ( Neely, 2009 )

    Maximal occupation chances are created by services sector due to this ground most of the persons are acquiring professional instruction or preparation that is required by services sector ( Hall and Jones, 2004 ). Due to this ground best and productive employees are non coming towards fabricating sector. Furthermore the occupations are really hard in fabricating sector as compared to services sector so work force prefer to fall in services sector as compared to fabrication sector

    Any possible investor has to do higher sum of investing for puting up a fabrication unit in UK because of strong local currency ( lb sterling ). Most of the times when investors want to put their financess they are puting in other states where the exchange rate is less every bit compared to lb sterling.

    The public-service corporation disbursals in UK is higher every bit good as cost of life and this is one of the possible failing due to which investors are hesitate to put in the UK fabrication sector. Furthermore higher public-service corporation disbursals will increases the cost of production for the fabrication concerns ( Girma and Gorg, 2002 )

    There are different kind of revenue enhancements that the general populace has to pay whenever they are buying anything. Furthermore income revenue enhancements and corporate revenue enhancements are besides comparatively higher in UK that besides discourages possible investors to put in UK.


    Tax alleviation that is announced by the revenue enhancement section for the UK fabrication houses is an chance for bing fabrication houses every bit good as for the possible investors who are happening a good topographic point for puting up their fabrication unit ( Peter, 2009 )

    Government is get downing to give some alleviation to the possible investors who want to get down any fabrication unit in UK. Government has started National Investment Corporation of ? 1 Billion for the development of fabricating sector of UK ( Rae, 2009 )

    Geographic location of UK makes it one of the ideal locations to put up a fabrication unit here. Access through UK for American markets is easier so any 1 who want to put up a fabrication unit he prefer UK

    Easy handiness of natural stuff, right substructure, secured location and skilled labour force make UK a best location to put up a works by any investor. Most of the investors are doing investing in UK fabrication sector to acquire all such advantages


    Menace to UK fabrication industry is the emerging market like China, India and Brazil which have now improved their local industries and are giving tough clip to different developed economic systems of the universe ( PriceWaterhouseCoopers, 2006 )

    Another menace to the UK fabrication industry is the low pay rate in different states as compared to UK due to this ground most of the workss and mills are reassigning from UK to other states where the pay rate is less ( Neely, 2009 )

    Transportation of one fabrication works from UK is a loss but this loss of fabrication works has an impact on other production units every bit good because some clip different other fabricating units are bring forthing natural stuff for a large fabrication unit. In this instance transportation of one fabrication unit has higher degree of impact on other fabricating units every bit good.

    Critical Analysis

    In the current subdivision I am supplying different information related with UK fabrication sector. Furthermore in the current subdivision I am supplying inside informations of different charts and figures that are provided in the appendix 1.

    Figure 1 is related with the proportion of assorted industries to entire fabrication gross value added ( gross inputs – gross end products ) and employment day of the month related with 2009. This graph is helpful for the users who want to acquire the information sing the proportion of each and every industry and its part to the entire fabrication gross value added. Furthermore this graph is supplying information related with the occupation creative activity for the UK work force by the UK fabrication sector. Overall part of fabricating sector in 2009 is that this sector has generated ? 140 billion of gross value added that is about 11 per centum of UK economic system. 2.6 million, persons are working in fabricating sector that is about 8 per centum of entire labour force of UK ( Department of Business Innovation and Skill, 2010 ).

    With the aid of figure 2 we can acquire the information related with entire fabricating employment and construction by business from 1994 to 2009. Harmonizing to this graph one point is clear that in 1994 UK fabrication sector was provided employment to 4.7 million peoples but in 2009 fabrication sector is supplying employment chances to merely 2.7 million workers. With the aid of this graph one point is clear that production, support and trades were using more workers in 1994 as compared to 2009 but all the other sectors like logistics and distribution, selling and gross revenues, support and professional, R & A ; D and production professional have provided more occupations to the employees in 2009 as compared to 1994.

    Figure 3 is supplying information related with fabricating employment in selected developed states ( Canada, France, Germany, Italy, Japan, United Kingdom and United States ) from 1990 to 2009. After analyzing this figure one point is clear that in all these states fabrication sector is now supplying less occupations as compared to earlier. But still now maximal employees are employed in US fabrication sector and figure is about 15 million. After US, the fabrication sector of Japan has created around 11 million occupations. Germany is at 3rd topographic point and German fabrication sector has provided occupations to around 8 million peoples. Next is Italy and around 5 million peoples are linked with the fabrication sector of Italy. France is following to Italy and its fabrication sector has provided occupations to around 3 million peoples. As discussed before that UK fabrication sector is supplying occupations to 2.7 million employees. Canada is at the terminal of this list by supplying occupations to merely 2 million Canadian peoples.

    Figure 4 is supplying information related with productiveness public presentation of UK fabricating sector from 1991 to 2009. This figure shows that overall employees that are linked with fabrication sector has additions and UK fabrication sector is lending its best in the economic development of UK

    Figure 5 is related with the entire exports of UK fabricating goods to other states. The proportion of every industry along with the sum of export is given in the figure 5. With the aid of this graph it is clear that every bomber sector of UK fabrication industry is lending something in the entire exports of UK for gaining cherished foreign exchange.

    Above mentioned information is critical because it is stand foring the part of UK fabrication industry in the economic growing. With the aid of this information one point is clear that UK fabrication sector is lending it portion into different ways e.g. this sector is supplying occupations to the UK work force, this sector is the 3rd largest sector of UK in footings of GDP and this sector is helpful to UK authorities to gain cherished foreign exchange by selling fabricating goods to the different other counties of universe.

    Decision and Recommendations

    Current study is helpful in explicating the part of UK fabrication industry in the economic development of UK. UK fabrication sector is at figure three in UK economic system in footings of UK GDP, after services and retail sector. In 2009 this sector has generated ? 140 billion of gross value added that is about 11 per centum of UK economic system. 2.6 million, persons are working in fabricating sector that is about 8 per centum of entire labour force of UK ( BIS, 2010 ). Furthermore this sector is helpful to UK authorities to gain cherished foreign exchange by selling fabricating goods to the different other counties of universe.

    In the current study I have provided PESTLE and SWOT analysis of UK fabrication industry that is helpful to analyze the political, economical, societal, technological, legal and environmental factors of UK fabrication industry every bit good as SWOT analysis was focused on strengths, failings, chances and menaces that UK fabrication industry is confronting in the current clip. Furthermore I have provided some figures and tabular arraies that have provided a comparing of UK fabrication industry in past to the current province. All these analysis are helpful to acquire an in deepness information about UK fabrication industry.

    Based upon my analysis at the terminal I want to give some suggestion that will be helpful for farther bettering the UK fabrication industry. Suggestion are provided as follows

    UK authorities should give some kind of revenue enhancement alleviation to the bing fabricating units every bit good as revenue enhancement vacation should be announced for the possible investors that are interested to put a fabrication works in UK

    UK authorities should give some kind of inducements to the bing fabricating units every bit good as possible investors by the manner of providing inexpensive public-service corporations so that more peoples will come to fabricating sector

    UK authorities and fabricating units should put higher resources on the research and developmental activities so that UK fabrication houses are able to bring forth those merchandises that have better characteristics. In this manner UK fabrication industry will able to give tough clip to the emerging economic systems like China, India and Brazil and their fabrication units

    UK authorities should take different stairss to cut down the higher labor cost that is presently being paid by the fabricating units in UK. This higher labor cost is one of the chief factors for which the houses are non set uping their fabrication units in UK. Emerging markets are giving tough clip to other developed states of the universe because labor cost in these states is low. For acquiring the benefit of inexpensive labour some of the fabrication houses are reassigning from UK to these emerging markets ( China, India and Brazil )

    In add-on to this UK authorities should seek to cut down the foreign exchange rate of lb sterling with other currencies. Investors have to put more if they want to get down their concern in UK because of higher value of lb sterling as compared to other currencies. Higher value of lb sterling is besides a critical factor for lessenings degree of investing in UK fabrication sector

    If the UK authorities is able to follow the above mentioned suggestion so decidedly UK fabrication industry will able to acquire more attractive force from the universe and it will lend more as compared to its current part.


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