According to a new report from Lloyds Bank, nearly 50,000 jobs will be created in the UK automotive industry over the next two years, as manufacturers bring production back to the UK.
The Fuelling Growth report, which surveyed English and Welsh manufacturers from across the automotive supply chain, found that 70% of them are looking to ‘on-shore’ some of their operations by the end of 2016.
Almost half of those surveyed said that they had already ‘repatriated’ a fifth of their production (on average). They cited cost and time reduction, improving UK economic conditions and the desire to support local communities as reasons for their decision.
The report also found that 76% of manufacturers in the sector expect to grow by up to 25% over the next two years, with an average expansion of 18% predicted. On average, each business plans to create 27 jobs, which gives a total of 49,635 jobs.
David Atkinson, head of manufacturing (SMEs) at Lloyds Banking Group, said: “Britain remains one of the leading players in automotive manufacturing, with a complex supply chain of high-value engineering that is attracting significant inward investment.
The sector’s growth in recent years has made the automotive industry the ‘jewel in the crown’ of the nation’s economy, and this looks set to continue, with thousands of new jobs predicted to be created. It is particularly encouraging to see the commitment of many firms to bringing their manufacturing processes back on-shore as a way of helping to support both local communities and the wider economic recovery of the UK.
“It is clear that automotive manufacturers are looking to the future with confidence, with so many having earmarked funds to re-invest in their businesses. Replenishing R&D budgets to maintain Britain’s competitive edge in the global market — particularly in the development of electric and low-emission technology — will be at the top of their agenda, while on-shoring is a trend that clearly has further to go.”
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “We welcome the findings from the report, which is further evidence of the renaissance in UK automotive manufacturing seen over recent years. The UK has some of the most productive vehicle-manufacturing operations in the world and a supply chain with the potential to compete anywhere.
"We want to see this recent domestic success develop further, to help encourage the re-shoring of the supply chain and the growth of UK based companies’ international markets. To ensure that this growth continues, we must maximise the UK’s structural advantages — flexible labour, design and engineering expertise plus a globally competitive business environment.”