In the first of a series of articles from the Manufacturing
Technologies Association, its director general – Graham
Dewhurst – looks at the role of manufacturing in the
economic recovery

There is no specific colour to the
ambivalence shown by successive
Governments to manufacturing based
engineering over the past thirty years. All
parties repeatedly ignored this vitally
important sector, believing in the miracle of
a ‘post industrial’ or ‘weightless’ economy.

During this period of ignorance, UK
engineering maintained its poise reinventing
itself in the absence of Government, and
indeed public recognition, successfully
moving from low value industries with low
margin volume products, into growing high
added value global markets. This
realignment resulted in quality UK
businesses capable and confident of
competing in World markets.

When the economic crisis bit in late 2008,
the MTA, confident in the qualities of its
sector, stated that it believed that engineering
based manufacturing would be in a strong
position to lead the country out of recession.

As we write, the UK economy is officially out
of recession, and so far the growth has
indeed been led, as predicted, by a recovery
in manufacturing output and particularly in
certain key sectors. This is in spite of
continuing difficulties with financing
constraints.

We hope that the new Government does
not repeat the mistakes of former
administrations, and that this time it
recognises the importance of manufacturing
engineering in a balanced economy.

There are compelling reasons why it should.

During the past five years, engineering based
manufacturing has outperformed the general
economy as a whole, and this trend is
continuing during the recovery following the
severe setback in 2009.

The ‘green shoots’ of this manufacturing
expansion are being driven by exports, with
lower exchange rates helping to make UK
products more competitive in overseas
markets. It seems an age since anyone in
Government or the media referred to our
balance of payments as an important
element of a healthy economy. It should be
back on the agenda.

So where can the growth come from?
Over the next five years, growth in the
UK’s biggest markets – Europe and the USA
– is likely to be sluggish at best. This provides
a challenge to companies to continue to
develop new products and to promote
innovation, and also to maintain capital
investment against a backdrop of lower
demand, and in the absence of freely
available finance. If UK engineering
manufacturing is to continue its growth
path, it will do so in concert with its
globalised end user markets; such as
aerospace, oil and gas, and medical. These
industries are dominated by large
multinationals operating on a global scale.

The challenge for UK companies will be to
maintain their position in these global
supply chains through competitiveness.

The dynamic growth of the Asian markets
does not provide a panacea. They will expect
to supply their own markets, and ours, with
the high volume products they have already
transferred into their economies.

This leaves the high added value niches
that they currently can’t deliver. These are
the products and services where UK
capability now lies. These products and
services can be supplied both in direct
exports, but also in domestic production as
part of a global supply chain.

The key to success will lie in staying ahead
on the technology curve – innovation,
flexibility, and speed to market will become
the drivers for success. UK businesses must
‘invest to innovate’. In this respect, the UK
has its own USP – its excellent university
network in engineering. There is a challenge
to UK engineering manufacturers to utilise
this USP through industrial partnerships, to
leverage innovation and speed to market
from these first class facilities.

The weightless economy has failed, and
will again. A window of opportunity exists
for engineering and manufacturing.

However, manufacturing now accounts for
only 12% of the UK economy; a long term
vision is needed to restore manufacturing to
its rightful place at the table. UK
manufacturing engineering continues to
outperform the UK general economy due to
its skills, commitment, and determination.

How much more potent will the delivery
be if it is supported by positive Government
policies?