UK Manufacturing Productivity Index

Q4 2023 UPDATE

UK manufacturers deliver £49bn productivity boost in 2023

FourJaw's quarterly analysis of ONS data shows that UK manufacturers ramped up productivity by £48.5bn in 2023, marking an 8.6% increase from the previous year, with significant contributions from the automotive and food sectors.

The total output for UK manufacturing reached £615bn in 2023. The year concluded on a positive note, overcoming a mid-year slump to achieve £155bn in output during the final quarter.

Q4 HEADLINE PERFORMANCE

Q4 HEADLINE PERFORMANCERead More

UK MANUFACTURING PRODUCTIVITY INDEX

UK MANUFACTURING PRODUCTIVITY INDEXRead More

SUBSECTOR OUTPUT & PRODUCTIVITY

SUBSECTOR OUTPUT & PRODUCTIVITYRead More

Q4 SUBSECTOR PERFORMANCE

Q4 SUBSECTOR PERFORMANCERead More

Q4 2023 UK HEADLINE PERFORMANCE

Source: Office of National Statistics & FourJaw Manufacturing Analytics 2023

154.6bn Total output value of UK Manufacturing (Up 2.5% YOY)

2.4% YoY PRODUCTIVITY INCREASE ACROSS THE SECTOR (WORTH £3.3bn)

1.1m Average output value per manufacturer (Up 8.2% YOY)

3.3% Productivity Increase per manufacturer YoY (worth £11.6k each)

UK MANUFACTURING PRODUCTIVITY INDEX

The UK manufacturing sector achieved productivity improvements worth £48.5bn in 2023, marking an 8.6% increase from 2022 levels, with significant gains in automotive and food production output.
The total value of UK manufacturing output reached £615bn in 2023, with a strong finish in the final quarter, producing goods worth £155bn and reversing a slight summer decline.
In the fourth quarter of 2023, UK manufacturing output was £3.5bn more than the same period in 2022, a 2.5% year-on-year increase, and £2.2bn more than in Q3 2023.
Output per manufacturer increased by 1.2% between Q4 2022 and Q4 2023, while productivity per manufacturer was up 1.0%. On average, each active UK manufacturer produced goods worth £1.13m in Q4 2023, up from £1.10m the year before, with output per employee up 2.0% year-on-year.

Manufacturers have realised they can’t hire their way out of a productivity problem and that manufacturing excellence is the only viable strategy for combatting supply chain uncertainty, high energy costs and skills shortages.

Chris IvesonFourJaw - CEO & Co-Founder

Subsector output and productivity

The motor vehicles and transport equipment sector saw significant year-on-year improvements, producing £3.9bn more output in Q4 2023 than in Q4 2022, supported by a 12.40% productivity increase worth £3.8bn.
Food manufacturing and alcohol and tobacco production sectors also noted substantial increases in output and productivity in Q4 2023:
- Food manufacturing achieved a 6.3% productivity gain year-on-year worth £1.7bn.
- Alcohol and tobacco production achieved a 21.4% productivity boost worth £1.0bn.

Manufacturing Productivity Index | CEO VIEWPOINT

Chris Iveson, CEO and Co-Founder of FourJaw Manufacturing Analytics provided his thoughts and perspective following the release of Q4's manufacturing productivity index.

"The manufacturing sector has demonstrated growth and resilience in the face of wider economic challenges. Manufacturers have realised they can’t hire their way out of a productivity problem and that manufacturing excellence is the only viable strategy for combatting supply chain uncertainty, high energy costs and skills shortages."

“Manufacturers know they’re only earning when their machines are turning. They’re adopting technology to see what’s happening in their factories and using data to optimise processes and decision-making on both the top floor and the shop floor."

"Technology makes productivity progress possible, but the big shift is cultural. We see production issues solved faster thanks to better communication between operators and managers, better investment decisions based on an objective assessment of needs rather than hearsay, and manufacturers sharing data across departments to invite new ideas and inspire continuous improvement."

HOW MUCH MORE PRODUCTIVE COULD YOUR FACTORY BE?

Manufacturing productivity can have a huge impact on a business's overall operational performance, competitiveness and profitability.

It is a key performance indicator that is just as important a 'health barometer' to an individual business as it is to the UK manufacturing sector as a whole.

There are various strategies that manufacturers can employ to increase productivity. One approach is to invest in technology and automation, which can streamline processes and lead to a reduction in manual labour, fewer errors, and increased production speed.

In addition, efficient supply chain management, minimising waste, and adopting sustainable practices all contribute to overall productivity. Regular evaluation and optimisation of workflows, along with fostering a positive work environment, can also have a significant impact.

When manufacturers proactively use FourJaw’s technology, they can achieve productivity gains of anywhere between 10-20% which can increase output capacity by as much as 30%.

Across the entire UK manufacturing sector, that would be a productivity boost of £61bn.

For a manufacturer producing £4.5m worth of goods this year, that means the ability to get £1.3m more output in 2024 from their existing machines, people and production lines.

Looking to increase your manufacturing productivity levels? Learn more about our technology and calculate your potential ROI via the links below.

Methodology

FourJaw Manufacturing Productivity Index

FourJaw’s data team analysed a range of data provided by the Office of National Statistics (ONS) to create a rolling five-year picture of output and productivity for the whole UK manufacturing sector and at the subsector and company level. Sources considered included the ONS’s index of production and producer price inflation datasets, and UK business activity, size and location statistical bulletins. Productivity levels were calculated by reducing the value of output figures by the corresponding inflation rate. Company-level figures are averages, based on the value of output and productivity per assumed active UK manufacturer at the time.