Pay soars despite Mexico and Russia overtaking UK in manufacturing world rankings

One bright spot is that the analysis dispels the myth that UK manufacturing jobs are badly paid; in fact, the average manufacturing salary at £38,769 is 10 per cent higher than for the average of the economy overall (£35,404).

The data is culled from 2022 (the latest year for which global comparisons are available) and show that UK manufacturing output was worth $259 billion. This is behind Mexico (£316bn) which has climbed to seventh on the back of an already strong manufacturing base but also Chinese investments made in the first Trump Presidency to counter tariffs.

Russia has climbed to eighth place ($287bn) on the back of substantially increased defence production which is now worth six per cent of GDP. Both these countries have also leapfrogged Italy ($283bn) and France ($265bn) who have dropped to ninth and tenth, respectively.

Taiwan has also edged very slightly ahead of the UK on the back of its global dominance of semiconductor manufacturing where demand has risen substantially in recent years.

China remains the largest manufacturing nation with output worth $5.06 trillion (almost a third of global production) followed by the United States $2.69trn and Japan $850bn.

Germany remains the biggest manufacturing nation in Europe by some distance ($751bn) and retains its position as the world’s fourth largest manufacturing nation, followed by India and South Korea who have swapped places in fifth and sixth.

Make UK says the data reinforces the need for the UK to adopt a long term industrial strategy as those countries who have such a strategy are clearly seeing the benefits on economic output.

A report by Make UK last year found that eight in 10 manufacturers felt they were at a competitive disadvantage compared to other nations with industrial strategies.

Verity Davidge, Director of Policy at Make UK, said: “There is no getting away from the fact it’s deeply disappointing to see the UK drop out of the world’s top 10 manufacturing nations for the first time.

“However, this isn’t a reflection of any decline in UK industry but specific factors and trends which are redrawing the contours of the global economy. These trends reinforce the need for the UK to react with a long term industrial strategy to take competitive advantage of our undoubted strengths. This will ensure the UK retains its place at the top table of advanced manufacturing where it has many world class sectors.”

The analysis of official data also shows that the United States remains the dominant export market for UK goods worth £60.1bn in 2022. Germany is the second highest destination (£33.bn) while The Netherlands is third (£31bn).

However, Make UK cautioned that trade with the Netherlands could be inflated artificially by goods being routed through Rotterdam for onward travel to other destinations. Ireland is the fourth largest export market (£28.2bn).

Six of the top 10 export markets are in the EU, worth approximately £150bn which is almost three times the exports to the US and around eight times the amount to China (£21.4bn).

According to Make UK, this highlights the continued importance of the EU for UK goods and the need for the new government to smooth out trade barriers with what overwhelmingly remains the UK’s dominant export market.

By sector, the food and drink sector is the biggest contributor to manufacturing Gross Value Added (21 per cent), followed by the Transport sector (largely aerospace and automotive) at 15 per cent.