West Midlands defies manufacturing decline, achieves 10% growth in last decade
A new report from Austin Consultants, an industrial systems integrator, reveals that manufacturers in the West Midlands have defied the overall decline in UK manufacturing over the last decade, delivering a 10% increase in combined turnover.
While official figures show an 8% real-term decrease in UK manufacturing output since 2014, Austin Consultants’ analysis indicates that the West Midlands is one of four parts of the UK to have achieved growth in the turnover of their manufacturing economies over the last decade.
The UK’s other manufacturing growth hotspots, where the combined turnover of manufacturing businesses has increased faster than inflation, were Scotland, Northern Ireland and Yorkshire & Humber.
Manufacturing employment increased in each of these regions, while factories also achieved combined productivity improvements of between 9% and 25%. Manufacturers in the West Midlands achieved a 9% increase in per-worker productivity, with output per employee reaching £276,000.
Austin Consultants’ report challenges the narrative of decline in UK manufacturing and highlights multiple pockets of growth where adaptability and innovation have led to significant success.
Five out of 16 main manufacturing sectors – food & beverage, medical, wood & paper, fabricated metal, and non-metallic mineral products – have experienced real-term growth in turnover since 2014. Most of these growth sectors have also boosted labour productivity, with manufacturers of non-metallic mineral products achieving the most significant improvements. Across this sector, manufacturers are now 32% more productive per worker than a decade ago.
Austin Consultants’ report links these productivity gains to digital transformation initiatives, which have accelerated in recent years. The adoption of industrial IoT, robotics, and other technologies has enabled many manufacturers to achieve cost reductions, improve throughput and boost labour productivity by up to 30%.
The report highlights critical challenges to digital transformation, including legacy systems, high initial costs, ROI uncertainty, vendor lock-in, and data management issues, that limit manufacturers’ ability to adopt new technologies successfully and outlines a pragmatic, problem-focused approach to help overcome these hurdles.
Chris Thoroughgood, Director at Austin Consultants, comments: “While the landscape for manufacturing is challenging, there’s a powerful story of resilience and growth, but also a digital divide between manufacturers making progress with technology and those struggling to transform. The manufacturing communities succeeding today are also hubs for advanced manufacturing, with multiple initiatives supporting innovation and growth, and although larger manufacturers have raced ahead with technology in the last decade, SMEs are now catching up.”
