Analysis of the latest ONS data by ‘innovation funding specialist’ Catax shows that the UK manufacturing industry’s R&D spending hit a record high of £4.4 billion in the first quarter of 2022 — up 6% on Q1 2021, despite continued disruption to supply chains and labour markets.
R&D spending on a quarterly basis also increased — by 4.7%. Catax says spending on R&D is vital to the UK economy because it helps firms compete for market share, revenue, foreign investment and creates skilled jobs.
However, the manufacturing sector’s performance was worse than UK industry as a whole. Total R&D spending by UK businesses rose 14.1% on an annual basis to reach £12 billion in Q1 2022 — equating to a 13.9% quarterly increase. By comparison, GDP in Q1 was up 8.7% on an annual basis, according to the ONS (the ONS R&D spending statistics do not factor inflation, which was running at an annual 7% in March this year).
Mark Tighe, Catax’s CEO, added: “The manufacturing industry is one of the UK’s biggest spenders on R&D. It is encouraging to see it hitting new highs at a time when manufacturers would also have been receiving an export boost from a weak pound. The fact that this performance comes despite a background of rising costs and labour shortages shows there is plenty of resilience there to weather any recession.”