UK manufacturers achieved a total production value of £150.9bn in the third quarter of 2024, marking a £1.9bn increase from Q3 2023. This 1.2% year-on-year growth occurred despite a smaller workforce, highlighting improved efficiency across the sector. However, the output value was slightly lower (1.2%) than in Q2 2024, attributed largely to a 0.7% decrease in factory gate prices during September. When adjusted for price changes, production levels in Q3 2024 closely mirrored those of Q2.
With 25,000 fewer workers in manufacturing compared to last year, output per employee has grown by 2.2% over the past year. This rise in productivity reflects how the sector continues to refine its operations. While there are now more manufacturers than in 2023, individual output per manufacturer has decreased slightly by 0.3% year-on-year, reflecting ongoing adjustments in the industry’s capacity.
Certain subsectors performed exceptionally well. Food manufacturing demonstrated strong momentum, with a 6.4% increase in output value to £26.5bn, supported by productivity gains worth £1.5bn. The coke and refined petroleum sector saw a slight dip in Q3 output value (1.2%) compared to Q2, but it remains 10% ahead of Q3 2023, realising a productivity boost of £224m over the year.
Similarly, chemicals and pharmaceuticals achieved a modest 0.8% increase in output value compared to last year, despite price pressures. Productivity in this sector has grown by 2.0%, equating to £197m in gains. Meanwhile, the motor vehicles and transport equipment industry reported a 1.1% annual rise in output, totalling £312bn, though this was down 5.0% from Q2 2024. On the other hand, the metals and machinery sector faced a challenging year, with output declining by 6.3%, amounting to a £758m reduction.
Chris Iveson, CEO of FourJaw Manufacturing Analytics, noted that these figures reveal a resilient and increasingly efficient sector. He highlighted that while businesses face challenges such as global economic uncertainty and delayed investment decisions ahead of the general election, the UK manufacturing industry is becoming leaner and producing more with fewer resources.
UK manufacturing is demonstrating its ability to adapt and thrive under challenging conditions. Increased efficiency and productivity gains show promise, even as certain subsectors face pressure. The industry’s leaner structure positions it well for future growth opportunities.
Likewise Group PLC (LON:LIKE) is a distributor of floorcoverings and matting and has the opportunity to consolidate the domestic and commercial floorcovering markets to become one of the UK’s largest distributors in this sector.
