UK manufacturers produced goods and materials worth £152.2 billion in the second quarter of 2024. This was 1.1% lower than Q2 2023, but up 1.5% on the first quarter of 2024.
Using the latest ONS data, our analysis, which informs our UK Manufacturing Productivity Index, reveals that most of the manufacturing subsectors recorded lower output levels in Q2 2024 than in Q2 2023.
Output fell furthest in the motor vehicles & transport equipment industries, which declined by £592m to £30bn, however, the SMMT has reported much of this decline has been put down to automotive manufacturers reworking their factories to accommodate the surge in demand for EV vehicles.
Food producers bucked the overall decline. The value of food production increased by 3.2% year-on-year to £25.7bn in Q2 2024, thanks in part to productivity improvements worth an estimated £1.4bn.
Producers of alcoholic beverages and tobacco products achieved a 2.6% year-on-year increase in output to reach £6bn. The value of alcohol and tobacco production was particularly strong in May 2024, with an output of £2.2bn representing the best month achieved by the sector since March 2016.
The production of coke & refined petroleum products increased by 5.0% over the same period to reach £2.5bn. This sector is estimated to have achieved productivity gains worth £64m in the last 12 months.
Although the manufacturing sector has seen output fall, the average output value for each active manufacturer is estimated to have increased by 0.4% year-on-year. Data from the ONS indicate that around 2,000 fewer manufacturers are operating in the UK in 2023 vs 2022.
Chris Iveson, CEO at FourJaw Manufacturing Analytics, comments:
“The latest data highlights a mixed bag for UK manufacturers, which continue to be affected by economic and political conditions, supply chain issues, and higher input costs. Most manufacturers have capacity constraints, and while lots are turning to technology to gain visibility and efficiency that can help unlock productivity improvements, we understand that large parts of the industry are delaying big capital investments in machinery while interest rates remain high.”
See the latest UK Manufacturing Productivity Index here.