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UK Manufacturing Sector Witnesses 6.6% Year-on-Year Productivity Surge in Q3 2023

by Anna

According to data analyzed by FourJaw Manufacturing Analytics, the UK manufacturing sector experienced a remarkable 6.6% increase in productivity during the third quarter of 2023 compared to the same period in 2022. The analysis, based on data from the Office for National Statistics (ONS), highlights that this surge was primarily driven by advancements in the automotive and broader transport equipment sector.

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The findings, incorporated into FourJaw’s UK Manufacturing Productivity Index, indicate that this productivity boost added £9.4 billion to the revenue of UK manufacturers. This growth continues a positive trend in manufacturing output and productivity, extending back to 2021.

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In Q3 2023, the total value of UK manufacturing output reached £152.4 billion, marking a £9.3 billion increase from the same period in 2022. However, it represented a £2.9 billion reduction compared to Q2 2023, marking the first quarter-on-quarter decline in manufacturing output since the beginning of 2021.

Notably, despite a decrease in the number of active UK manufacturers from 138,000 to 136,000 during this period, year-on-year improvements in output and productivity were achieved. Output per manufacturer increased by 8.0% between Q3 2022 and Q3 2023, with productivity per manufacturer rising by 8.2%. On average, each active UK manufacturer produced goods worth £1.12 million in Q3 2023, compared to £1.04 million the previous year.

The motor vehicles and transport equipment sector exhibited the most significant year-on-year improvements, with Q3 2023 output £5.3 billion higher than in Q3 2022. This was supported by a 19.7% increase in productivity, contributing £5.1 billion across the sector.

Other notable improvements were observed in the food production and electronics sectors. Food production achieved a 6.2% year-on-year productivity gain, amounting to £1.4 billion, while the electronics sector delivered a 9.8% productivity improvement, contributing £1 billion in Q3 2023.

Chris Iveson, CEO at FourJaw Manufacturing Analytics, expressed optimism about the sector’s resilience despite existing challenges. He noted, “Manufacturers face significant challenges and uncertainties right now. However, many do so from a position of strength, having delivered improvements in output and productivity over the last two years.” Iveson highlighted factors such as growing order books, reshoring activities, and increased use of smart technologies contributing to the industry’s positive trajectory.

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