Factory worker shortages deal £6.5bn blow to UK economy
A shortage of factory workers is dealing a £6.5bn blow to the UK economy, while London and the South East’s manufacturing economy is outpacing any other in the country, a new report out today has claimed.
Factories are still to fill 74,000 empty roles, representing a big slice of lost output, according to industry body Make UK and consultancy BDO.
It is another sign that the UK’s jobs market is in a period of imbalance, with companies in certain sectors seeking out more workers than are available.
Britain’s economy is also largely geared toward producing services, which contributes about £2 in every £3 of output. As a result, manufacturing firms face fierce competition for staff that typically leads them to encountering recruitment roadblocks.
“Manufacturing companies across the UK have had to overcome the multiple challenges thrown up by Brexit, shortages in skilled labour, pandemic-related supply chain delays and the huge energy price rises we have seen following the Russian invasion of Ukraine,” Richard Austin, head of manufacturing at BDO, said.
Despite those issues, manufacturing jobs across the UK are on the up, which Make UK and BDO said disproves the “the long-held narrative of inevitable decline in manufacturing employment”.
Six out of eight English regions’ factory workforce expanded last year, with Yorkshire and Humberside experiencing the biggest increase, up to 316,000 in December 2022 from 270,000 in the same month in 2021.
London and the South East have the greatest volume of manufacturing roles in the UK at 430,000, up slightly from 427,000, and representing four per cent of the area’s entire employment.
It is also the region that has undergone the biggest uptick in its output since before the Covid-19 pandemic up 19 per cent based on latest numbers for 2021. All other regions have regained their pre-pandemic output levels, except the West Midlands.