PwC: Scotland emerges as UK’s manufacturing powerhouse

PwC: Scotland emerges as UK’s manufacturing powerhouse

Jason Morris

Scotland has emerged as the UK’s most productive manufacturing region, with manufacturing output per hour being 19% higher than the UK average, according to new analysis by PwC UK.

The new findings come as part of PwC’s Industrial, Manufacturing and Services Productivity Tracker, which analyses productivity progress – with a focus on key sectors that contribute to UK growth including manufacturing, construction and services.

The Industrial, Manufacturing and Services Productivity Tracker, produced by PwC UK attributes Scotland’s success in manufacturing to key subsectors including food and drink (26.6%), chemicals (10.6%) and pharmaceuticals (8.4%) – with strong performance in the hydrocarbons and oil industry and a strong pharma services community within the region.

However, the analysis also points out that there is still room for growth in manufacturing productivity, which has been modest at 5.2%.

The analysis highlights three key recommendations for boosting productivity across the UK’s regions – including championing regional ‘clusters’ of businesses within common goals and interests; a focus on future skills; and the development of ‘place-based’ strategies in the absence of a national industrial strategy.

Jason Morris, Regional Market Leader for PwC Scotland, said: “It’s heartening to see Scotland leading the UK regions with regards to manufacturing productivity – particularly given that our manufacturing sector accounts for just over half of our international exports and a significant proportion of business expenditure [47%] on the research and development front.

“Scotland’s historic prowess in heavy industry and manufacturing has evolved over the decades, and we have successfully built and capitalised on new areas of strength.

“For example, with more than 150 companies and 9,000 skilled professionals based north of the border, Scotland is building a fantastic reputation in pharmaceuticals manufacturing, cementing its place outside of the traditional ‘Golden Triangle’ of London, Oxford and Cambridge.”

Mr Morris continued: “The existing ‘hub’ of companies sitting on the outskirts of Glasgow, within and immediately adjacent to the new Advanced Manufacturing Innovation District, is a prime example of how regional clusters and place-based strategy can boost certain sectors.

“However, there are certainly opportunities for growth – not only specifically in manufacturing, but in terms of overall productivity.

“Previous insights including our recent Golden Age Index and Green Jobs Barometer, have highlighted the need to reskill and upskill different areas of the labour market and we cannot ignore the persistent productivity gap that is often highlighted as part of our UK Economic Outlook.

“There’s a real opportunity for Scotland to step up productivity across key sectors.”

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