Years of manufacturing decline may be over

New generation of manufacturers at Axiom

New generation of manufacturers at Axiom

A long term decline in the UK’s electronics manufacturing output seems to have stabilised in the last two years.

Manufacturing output experienced a sudden fall in the 2009 recession, but this came on top of a longer term steady decline in output as volume manufacturing moved off-shore to lower cost regions in Asia and eastern Europe.

But as the industry struggles to emerge for the 2009 credit-crunch fuelled recession there is an indication that manufacturing situation may be more stable.

The UK’s manufacturing base as a whole is in a better place than it was just three years ago. The latest figures from the Office of National Statistics (ONS) show that the manufacturing sector grew by 0.9% between July and September, which outpaced the service sector’s 0.7% growth rate.

“We are in a situation where the existing manufacturing base is no longer going off-shore,” observed Adam Fletcher, chairman of the ecsn.

“What we are seeing is greater thought about the impact on total acquisition cost of off-shoring, this is resulting in some projects remaining in the UK / Europe, which is sensible and likely to continue,” said Fletcher.

It is worth remembering the electronics supply chain can benefit from a resurgence of car making in the UK.

Executives at Jaguar Land Rover, Visteon, Renesas and Freescale made the plea at the recent conference held by the NMI’s automotive network (AESIN) recently called it “a once in a generation opportunity.

It is the wider adoption of intelligent systems within the vehicle and the surrounding environment, coupled with changes in regulation and legislation which is describing a heightened level of activity in the UK’s automotive industry.

The UK’s automotive industry is in a growth phase again, and automotive production set to grow at 9% per year.

See: Automotive industry has big opportunity, UK companies must act 

Electrical and optical manufacturing output decline (ONS)

Electrical and optical manufacturing output decline (ONS)

A combination of rising labour costs in the Asia and the investment of UK-based manufacturers in high-value manufacturing technology are reducing the cost differential.

“We are seeing some evidence that small to medium scale manufacturing is on the increase however,” said Chris Shipway, country director at Avnet Memec.

Nigel Watts, group managing director at Ismosys, is more outspoken saying there is an opportunity for UK manufacturers to demonstrate that it’s not all about China or the Far East.

“It is time we captured the imagination of the world once again not only by developing great technology but taking that technology and engineering, manufacturing, selling and deploying it,” said Watts.

And he added: “We need to make the world take notice of us again and at the same time inspire the next generation of engineers and technologists.”

See: Manufacturing make-over attracts talent

 

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