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UK Manufacturing Sector Achieves Record Productivity Growth in 2023

by Anna

The UK manufacturing sector witnessed a significant surge in productivity in 2023, reaching improvements valued at £48.5 billion, according to an analysis of Office for National Statistics (ONS) data conducted by FourJaw Manufacturing Analytics. This remarkable achievement represents an impressive 8.6% increase compared to 2022, with substantial contributions from key industries such as automotive and food production.

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FourJaw’s analysis, which forms the basis of its UK Manufacturing Productivity Index, indicates that the total value of UK manufacturing output soared to £615 billion in 2023. Notably, the end of 2023 saw a robust performance, with manufacturers rebounding from a slight summer decline to generate goods worth £155 billion in the final quarter.

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Performance Highlights in Major Manufacturing Sectors in Q4 2023:

The total value of UK manufacturing output in Q4 2023 witnessed a £3.5 billion increase compared to the same period in 2022, marking a notable year-on-year growth of 2.5%, and £2.2 billion more than in Q3 2023.

Output per manufacturer experienced a 1.2% increase between Q4 2022 and Q4 2023, while productivity per manufacturer rose by 1.0%.

On average, each active UK manufacturer produced goods worth £1.13 million in Q4 2023, up from £1.10 million the previous year. Output per employee also saw a 2.0% year-on-year rise.

The motor vehicles and transport equipment sector demonstrated substantial year-on-year improvements, with a £3.9 billion increase in output in Q4 2023 compared to Q4 2022, supported by a remarkable 12.40% productivity increase valued at £3.8 billion.

Food manufacturing and alcohol and tobacco production also recorded significant gains in output and productivity in Q4 2023. Food achieved a 6.3% productivity gain year-on-year, equivalent to £1.7 billion, while alcohol and tobacco experienced a 21.4% productivity boost valued at £1.0 billion.

Chris Iveson, CEO at FourJaw Manufacturing Analytics, emphasized the sector’s resilience and growth amidst broader economic challenges. He highlighted the crucial role of manufacturing excellence in addressing supply chain uncertainties, high energy costs, and skills shortages, emphasizing the importance of adopting technology and data-driven decision-making to optimize processes.

Iveson noted that technology plays a pivotal role in driving productivity progress, but underscored the significance of cultural shifts within manufacturing organizations. Enhanced communication between operators and managers, informed investment decisions, and data-sharing across departments are cited as key factors fostering continuous improvement and driving productivity gains within the sector.

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