Welsh manufacturing: In focus
In fact, ONS figures show that 11% of jobs in Wales are in the manufacturing industry. That’s significantly higher than the national average of 7.6%. Furthermore, 16% of the gross value added (GDA) to the Welsh economy last year was in the manufacturing sector, demonstrating the substantial contributions of this sector to the wider budget.
Manufacturing goes from strength-to-strength
According to our latest Employment Outlook Survey, manufacturing is currently the most confident sector in the UK in terms of hiring intentions. And it’s the first time since 1997 that it has ranked so positively in our survey. This result may reflect how attractive the sector is to foreign investment at the moment: following the shock election result, currency is cheap and sterling’s weakness is manufacturing’s strength.
However, the picture isn’t quite so rosy in the Welsh jobs market specifically. Once again, Welsh employers – across all sectors – are cautious about hiring. So much so, that hiring intentions stand at their lowest level since 2014, and far below the national average.
For some, it seems that holding a snap election just over a week before Brexit negotiations begin made them even more cautious in their hiring plans. However, low confidence in hiring isn’t new to the region. Wales’ hiring confidence has been below the national average every quarter for the past year.
The future’s bright…
Given the strength of UK manufacturing and the extensive footprint that already exists in Wales, could greater emphasis on growing this industry be the key to improving hiring confidence across Wales as a whole? I think so. After all, the last few months have seen countless good news stories coming out from the Welsh manufacturing market. It’s a great platform for us to build from.
For example, earlier this year, Sony announced that they would produce their ‘next generation’ 4K cameras in Pencoed, South Wales. It’s the first time that these cameras will have ever been produced outside of Japan. To me, this demonstrates the confidence they have in the factory’s highly skilled team and facilities. And I can testify to that myself, having toured the factory recently.
Another positive story coming out of Welsh manufacturing is the Welsh Government’s announcement that it would invest £12 million into the development of a compound semiconductor factory in South Wales. This is the innovation behind future technologies like robots, 5G and driverless cars. It’s set to create an additional 2,000 highly skilled manufacturing jobs in the next five years.
Finally, Airbus recently sung the praises of the Welsh manufacturing market too. Steve Thomas, Government Affairs Executive at Airbus UK, was quoted as saying: We’ve got future bookings extending over ten years. There’s a great level of optimism associated with that order book and the future prospects we have… my advice to other companies looking at operating in Wales is, ‘come and join us’.
Wales going for growth
To be honest, my list of ‘good news’ from Welsh manufacturing could go on and on. But the key point to take away is this: the sector continues to go from strength-to-strength, but there’s plenty more that can be done to grow the sector even further.
Accountancy and business advisory firm BDO LLP highlighted one example. When writing in the EEF’s latest Manufacturing Outlook report, they stressed the need for further education and investment in the UK’s manufacturing sector over the coming years. As the move towards digitisation and automation gathers pace, they say this will ensure we can keep pace with our global competitors and meet the increasing demands of consumers.
This certainly mirrors what I’m seeing in Wales specifically. With additional investment to encourage new manufacturers into the region, and improved education to encourage more workers too, I’m certain that this sector can drive growth and positivity across the entire Welsh economy.
Will manufacturing be able to pull Wales out of its labour market slump? Let me know what you think, by contacting me on [email protected].