UK manufacturing employment nosedives, with automation looming

29 June 2017 Consultancy.uk

The UK has seen the number of manufacturing jobs fall by 17% over the past decade, with around 620,000 jobs lost, according to estimates based on data from the Office of National Statistics. The North-West was one of the worst hit regions, haemorrhaging 77,000 jobs since 2006, which comes as part of a larger decline of traditional labour in the area. Digital disruption resulting from innovative new Artificial Intelligence could see that figure rise further, however, with the industry hosting many repetitive roles that could be automated.

The Office of National Statistics’ (ONS) Annual Population Survey (APS) has been run since 2004, collecting employment estimates based on a sample of at least 510 persons in each unitary authority or local authority district area. The figures cover all jobs over a 12 month period, however the data in question focused exclusively on manufacturing.

Utilising the most recent data available from the APS, Britain’s third largest trade union has published figures claiming manufacturing jobs in the UK have fallen by over 619,000. General union GMB, which has more than 631,000 members in multiple employment sectors, discussed the figures at their annual congress in Plymouth.

The UK, which according to 2006 APS estimates hosted over 3 million manufacturing jobs nationally, saw that figure decline to a historic low 2,926,000 over the following decade, a drop in manufacturing employment of 17%.

The UK has seen the number of manufacturing jobs fall by 17% over the past decade

Of that, 99,600 jobs were estimated to have been lost in the West Midlands, the area which saw the largest numeric losses. Meanwhile, Scotland and the North East saw the worst proportional reduction in their manufacturing workforce, each region witnessing a 22% decrease in the sector.

The North West of England was also notably hard-hit over the past decade, the ONS statistics pointing toward an industrial reduction of 77,000 jobs or 18% of the sector’s workers. Between them the lost jobs have meant the North West has seen an estimated £725 million real-terms fall in wages paid for manufacturing work, while manufacturing wages remain 20% higher than the national average.

Paul McCarthy, the GMB Regional Secretary for the area, said of the study, “The North West is haemorrhaging manufacturing jobs – and it’s massive problem for both our workers and our economy. We should cherish our manufacturing sector, but instead successive governments have driven it into the ground through a lack of investment and tendering processes that hamper our home-grown businesses.”

Wider trend

The release of the figures comes shortly after the recent purchase of a number of struggling industry competitors by Bolton Textiles Group, in a deal brokered by RSM administrators. The North-Western businesses recently announced that following financial hardship the sale was likely to save more than 100 jobs in the region – however, textile manufacturing employment in Lancashire has been under mounting pressure since the turn of the century, falling victim to globalisation as cheap imports priced many historic names out of the market. In 1999, the Knitwear, Footwear and Apparel Trades Union estimated that 41,000 jobs had been lost that year - the equivalent of one textile factory closing every day.

Automation and robots set to displace many more manufacturing jobs

Following the global financial crisis of 2008 meanwhile, the market took a further hit, with the then hallmark company Hyndburn seeing 27 jobs lost from its Accrington plant, as it was sold by administrators from Big Four consulting firm EY, with administrators selling the company to Manchester-based linens firm Vision Support Services Group, safeguarding 53 of 80 jobs. While cost-cutting in times of crisis may have been the significant contributing factor to the plunge in manufacturing employment however, workers across all sectors now face new mounted pressure from industrial automation, as a period of economic realignment looks set to set in amid the disruption of technological innovation.

According to research by consulting firm PwC, the greatest increase in new UK occupation titles between 1990 and 2010 were in digital occupations, with the proportion of the workforce employed in occupations whose title came into existence after 1990 growing to 6% across the UK. However, despite this initially optimistic outlook, PwC’s report concluded the while digitalisation has created numerous jobs in the past 10 years, long term employment growth due to digital technology is set to decrease between 2014 and 2024 compared to the period from 2004, while other studies have shown new innovations could see job losses across many sectors, particularly in manufacturing.

Recently a study by the research arm of McKinsey & Company suggested that 5% of all jobs could be completely replaced by technology, while over 60% of all work activities could be automated by 2055. Among the 5% roles found most suitable for automation, the researchers found manufacturing jobs some of the most physically repetitive, and therefore targets for businesses to utilise new, cheaper technology to undercut the wage-demands of their present employees.

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