New research suggests that the contribution of the manufacturing sector to the UK economy has been undervalued by £50bn.
The study has been carried out by Cranfield University and its methodology has been used to form the Enhanced Manufacturing Growth Index.
The University’s data estimates a £208bn contribution by the manufacturing sector to the UK’s economy, that’s a rise of 3.3% in comparison to the Office for National Statistics’ initial calculations.
The Cranfield researchers advise that 13.5% of the UK economy is made up from the manufacturing sector’s Gross Added Value, based on its ability to increase growth in other areas such as support, production and design.
University researchers argue that their study is more in tune with the modern world of manufacturing in comparison to the long-established model.
Over the last three months it has been reported that roughly 20,000 people have lost their jobs in UK manufacturing and Professor Rajkumar Roy who led the University’s research hopes the data they have gathered can be of benefit to the domestic production sector.
He said that people have long since underestimated the manufacturing sector’s value to the UK economy and that we should celebrate the industry’s success.
Professor Roy continued to say that the data they have gathered is a more accurate reflection of how valuable the manufacturing sector is to the UK economy.
He stressed that their results are highly accurate and have been ratified by various experts including members of the Engineering Employers’ Federation.
Chief economist of the EEF, Zach Witton, said that many UK manufacturers’ business models have shifted from just physical production to a host of different activities, including customer service support and product design.
He summarised the University’s research by stating that their growth index is a positive move towards highlighting the industry’s recent shift towards different activites.