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The State Of Manufacturing In The Region

Karen Regn Asks Whether The First Industrial Society Is Still

Written by . Published on December 19th 2011.

The State Of Manufacturing In The Region

TEAM Merkozy are in theatre, gowned and scrubbed – and as the rest of the world keep an ear out for the flatline, they are working like mad.  Merkel and Sarkozy and the rest of the Continent are desperate to find a Eurozone defibrillator.   

In fact, if you took the North West as a country in its own right, it would be the fourteenth largest economy in Europe. The only larger region would be the South East, which would be higher on the list.

As we watch countries fail and drag the Euro further down with it, our own financial health springs to mind, as surely as a funeral brings thoughts of one’s own mortality.

Worries that a bankrupt Greece will cause a drop in demand for our exports aren’t foremost on the minds of Manchester’s manufacturing experts, however.  Neither are they bracing themselves for the crash and burn of the Euro.  The worrying issues, they say, are much closer to home. 

Notably, export companies aren’t sweating over Greece’s dampening effect on business.  A spokesperson for Barrington Freight, said: “Greece is probably down more than any other country, but it’s not made much of a difference for us.”  The company, who claim on their website to be the market leaders in freight from all worldwide destinations, admitted they were not overly concerned about Greece’s stumble. “It’s not one of our better markets to be honest,” he said.

Adam Buckley, Head of Programmes for The Manufacturing Institute, says Greece is a prime example of an off-kilter balance of trade. “Its biggest export is tourism - like Spain to some degree as well as Italy,” he said.  “As far as exports, they have a huge discrepancy between what they bring in and what they put out.”

Manchester, on the other hand, with the vestiges of a glorious industrial past, still has a firm base in manufacturing. 

According to Buckley, Mancunians who manufacture are still the backbone of the economy. 

“Manufacturing is a crucial sector. For every job in manufacturing there are two jobs relying on it in other sectors. So one job that is lost puts two other jobs at risk,” he said.

“Manchester has a lot going for it.  Most of our exports go to Northern Europe and exports numbers are holding up pretty well at the moment. The level of optimism with a number of companies is high and manufacturing is pretty stable in the face of some European shocks. Part of what helps protect manufacturing is its diversity -- from food and drink manufacturing to aerospace to digital media, diversity make Greater Manchester one of the best balanced economies in the country.” 

The Greater Manchester area has a very strong base of advanced manufacturing compared with other parts of England.  Greater Manchester still contains almost half of all textile employment in the North West and manufacturing in the food sector alone is worth over £900m. 

We’re home to major centres for Kellogg’s, Heinz, PZ Cussons, Unilever, and Accrol Papers, to name a few.

In fact, if you took the North West as a country in its own right, it would be the fourteenth largest economy in Europe. The only larger region would be the South East, which would be higher on the list.

Experts are agreed, however, that if we could produce more, export more, and import less, we could balance our economy and put ourselves on economically firmer ground.

And some believe we leave great room for improvement.

Mills CrumblingThe old manufacturing is dead: but there's plenty still left

In a report by New Economy, analysts stated that although Greater Manchester firms are currently making £7 billion from goods and services export sales, the area as a whole is underperforming.  Leeds and Birmingham, they said, are outstripping us, and we need to make strides to improve.

Following George Osborne’s speech last week, Baron Frankal, New Economy’s director of economic strategy, told Manchester Confidential: "Manchester is well placed to benefit from additional infrastructure expenditure with projects such as the electrification of the line between Manchester and Leeds, Rochdale’s Transport Interchange, the development of the Manchester Cross City Bus, and improved access to Manchester Airport via the road networks.”

Dr Ed Amann, a Reader in Development Economics at Manchester University, praised Manchester’s position as a transport and shipping hub as well, but agreed with New Economy’s call for more exports.

He explained: 

“In the Midlands, you have a slightly better concentration of car manufacturers that you don’t have on quite the same scale in Manchester, and that contributes to their higher numbers as far as exports.  Manchester is a great centre for the textiles industry, and there are still some strong companies still around, but a lot of it is gone now.”

“Manchester does need to export more; in the sense that all of the UK does, and particularly we need to target markets in Asia and parts of the world where the markets are growing.”

“In terms of overall output, manufacturing would only constitute a small part in relation to the total.  The economy is dominated by services, but nonetheless it’s very significant in industries from engineering to chemicals.”

The worries, say Buckley and Amann, are the wave of retirements due in the next twenty years, which will leave the manufacturing sector with a massive requisite of hiring and training.

In the next twenty years, one-third of the food and drink workforce is due to retire.  And the average age of employees across the sector is now between 45 and 54. 

As a result, manufacturers will need to replace around 587,000 employees in the period to 2016/17, and the loss of skills will be staggering.

The shortfall is augmented as the country only had 119,800 apprenticeships in 2010/11 leaving many staff and skills deficits and associated challenges.

And according to the Regional Economic Forecasting Panel, growth of the working age population (WAP) between 1990 and 2009 was 0.1% pa, compared to a UK average of 0.4% pa, as well as a marked slowing in the number of international migrants. Slow growth in the labour pool is expected to continue through to 2030. 

Other dreary statistics include the revelation that the proportion of WAP qualified to Level 4+ is lower in the North West (27%) compared to the UK (29.5%), though analysts note that strides have been made in the last two years to close the gap. 

“People are absolutely crucial,” said Dr Amann. “And I think someone who is considering such a career should look into how they can acquire the skills needed, in engineering for example, and do internships where available.”

If manufacturers and economists in Manchester are right, the fall of Greece is a wake up call for more of us here to get in touch with our roots, roll up our sleeves, and make more stuff for foreigners. 

Taking a good look at Europe seems crucial now, despite the shiver it may bring to the spine.  

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6 comments so far, continue the conversation, write a comment.

the Whalley RangerDecember 19th 2011.

Well written article - the structural deficit analysis appears to be key when it comes to anticipating our future prospects.

When I was born, one pound sterling was worth about 8 Deutschmarks. Today, one quid will get you 2.3 Deutschmark equivalents.

Very crudely, this indicates how much this country has 'sold out' since then, or how much of its financial power it has lost in a generation.

Measures by successive governments to allow dubious structured investment vehicles, the demutualisation of the building societies and the bad-deal-for-the-public PFI contracts have only helped the further sell-off of this country's assets for the benefit of a few.

Few make extraordinary gains, the rest of society bleed.

What is the difference to the Russian system of Oligarchy? I thought this was frowned upon in the Western world?

HMG Paints ManchesterDecember 20th 2011.

It’s not just the big companies who have boosted the North West economy; also the SME’s are playing a major part. Over at HMG Paints the last 2 years have seen fantastic growth, after celebrating our 80th Birthday in 2010, we’ve gone from strength to strength. The highlights of this year have included record production & Litreage figures, which also created a record turnover for the company which is still managed and run by the Falder family who founded HMG Paints in 1930.

HMG Paints also became the UK’s Largest Independent Paint Manufacturer, a testament to the hard work of the staff and our track record of supplying premium & innovative products which are backed up by excellent technical support.

We have also recently been awarded a £1.2 million in the second round of the Regional Growth Fund programme from the Government, this will be used to further develop our Water Borne Paint technology, whilst potentially creating 50 new jobs and securing 170.

With the skills, technology and perhaps most importantly the people we have in the North West Manufacturing scene the future is very bright for the area and there is no reason why those figures can’t continue to grow, with investment coming from the existing companies and those externally looking for a great place to invest.

Jonathan SchofieldDecember 21st 2011.

Well done HMG. Good news

Calum McGDecember 21st 2011.

Where can we buy some local paint, then, instead of that Dutch nonsense :)

HMG Paints ManchesterJanuary 27th 2012.

Ali you can buy it direct from us at our site in Collyhurst our website is http://www.hmgpaint.com or you can call us on 0161 205 7631

Calum McGJanuary 27th 2012.

Then I promise to check you out. Back in the 70s my Ma used to work for a paint company in Bolton, doing all kinds of crazy research! Happy to buy local! :)

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