As key industry stakeholders gather in Leeds for UKREiiF, one of the UK’s largest property and infrastructure events, it’s time to get talking about the importance of an industrial strategy, not just for the logistics and manufacturing sectors but across the whole built environment.
Manufacturing has a bad rep. There I’ve said it. For too many, manufacturing conjures up low paid, mass production, the old blue-collar worker. From 1870 to 1960, manufacturing was a key component of the UK’s economy, one of the biggest sectors in terms of revenue and workforce opportunities, with the likes of Ford embodying the ‘Made in the UK’ sense of pride. Despite the often-negative media coverage, manufacturing is still an area of growth for us here in the UK with the total value of UK manufacturers’ product sales reported by the Office of National Statistics at £429.8 billion in 2022, an increase of 7% from 2021[1]. And we still have some impressive manufacturers who base themselves in the UK, Rolls-Royce, Jaguar Land Rover, GSK, Diageo and Airbus to mention a few. Yet as a location we still have the potential for so much more and it is only through a comprehensive industrial strategy will we have the potential to realise this growth.
Fragility of the supply chain
If the last few years have shown us anything within the built environment, it has been the fragility of supply chains. This became more pronounced when the pandemic hit changing the shape of the supply chain overnight. Where pre-Covid, construction stakeholders were used to immediate delivery and product on demand, suddenly projects had to rely on delayed deliveries and stock piling became the norm. Then of course, over the recent years the supply chain has been impacted by the invasion in Ukraine, resulting in an energy crisis and then last year’s Houthi attacks in the Red Sea with the resulting delays and additional costs to the supply of essential products. If the case for reshoring, or near shoring, wasn’t solid before, the need for robust supply chains to the UK and Europe and to be less dependent on the importing of goods and energy from other regions, has become more apt than ever.
The UK as a location of choice for manufacturing
As we head towards a General Election later this year, now is our opportunity as a country to showcase the benefits of manufacturing in the UK, to raise the narrative that we not only have a history of manufacturing, but we have the highly skilled workforce, the best locations, and the infrastructure to support it here in the UK. We want to encourage whatever colour the next government is to incentivise foreign investment into the UK manufacturing sector and to see it as an opportunity on a par with the financial and technology industries. We need them to commit to an Industrial Strategy for the long term, not the duration of a parliament
We have already seen the Chancellor, Jeremy Hunt, in his Spring Budget commit to £ 270m for new aerospace and automotive manufacturing, additional to the investment of £ 4.5bn to the development of an Advanced Manufacturing Plan in his Autumn Statement, and we know that manufacturing was one of the government’s five key commitments. Labour has also said that they will commit to a robust and considered industrial strategy in their manifesto, so we know we are heading in the right direction when it comes to future promises.
Manufacturing is the start of the economic cycle, production of goods creates jobs, boosts economies, and brings social mobility to under-funded areas. Sub sector growth in defence, with Jeremy Hunt quoted as bringing military spending to nearly 2.25% of GDP by 2025, and the exponential rate of advancement in both the advanced tech and life sciences industries will continue to have huge knock-on effects on the manufacturing sector too.
The need for an energy strategy to fuel development
As part of this industrial strategy, we also need to recognise the burning challenge of power as a crucial aspect in any development – be it manufacturing, data centres, residential or commercial. Whatever government gets the UK vote, there is a need for a clear and sustainable energy roadmap and a long-term commitment to how we extend our energy capacity, to illustrate how we will power these developments in five, 10 and 25 years. As we move away from our reliance as a nation on hydrocarbons towards greener energy strategies such as wind, solar, hydrogen and battery, we will still have to understand how we will power factories like the recently announced Tata one. A recent statistic I heard emphasised the need to solve this conundrum – for every UK householder there is 109sqft of warehousing space in operation with an anticipated demand on 80sqft in the future. If the government’s ambition to build 100,000 new houses per year is realised, we are talking about nearly 8msq ft of warehouse space per year to service these homes. An industrial strategy that combines an energy roadmap to fulfil these developments as well as an informed planning policy that understands these requirements is now crucial for growth.
Encouraging talent and nurturing it into manufacturing
The definition of manufacturing is “the business or industry of producing goods in large quantities in factories”. We have some of the best architects, construction innovators and delivery partners here on our own soil to fulfil this definition, and we need to galvanise the government to recognise this. We also need to encourage talent to stay in the UK and nurture new talent into manufacturing. Today far from the blue-collar roles of old, manufacturing is about high skilled roles that command the respective salaries. We need our next generation and future professionals to see the sector as an aspirational career of choice.
We have come a long way from the days of the Victorian factories, yet the reputation of the industry has not. Now is the time for manufacturing to be seen for what it is – a foundation for economic stability and growth, where we nurture and retain great people, that propels us forward into this century and beyond. And for us as a nation to move away from strategy based on political party politics and to long term investments, that support the design and building of factories and manufacturing space, that will bring longevity and stability to the UK economy.
[1] https://www.ons.gov.uk/businessindustryandtrade/manufacturingandproductionindustry
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