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UK manufacturing tops the league for productivity gains

Posted on 31 Jan 2025. Edited by: John Hunter. Read 590 times.
UK manufacturing tops the league for productivity gainsRecent analysis of global manufacturing output carried out by Sheffield-based FourJaw Manufacturing Analytics for last week’s National Productivity Week shows that the value added by manufacturing employees in the UK increased by almost $14,000 per worker between 2018 and 2023. Furthermore, these gains were higher than those achieved in any other major manufacturing economy over the same period.

World Bank data show that UK manufacturers delivered net output worth $280 billion in 2023 after removing the cost of energy, materials, and other inputs. FourJaw’s analysis, which also draws on OECD workforce data, reveals this equated to $109,000 of added value for each of the UK’s 2.6 million manufacturing workers in 2023. This figure was 15% more than the $95,000 value-add per worker achieved five years earlier.

The UK’s productivity gains have elevated the value of per-worker manufacturing output above that of Germany ($106,000), South Korea ($93,000), and Japan ($76,000). These economies continue to produce more than the UK in absolute terms and previously outperformed the UK on per-worker productivity. Only manufacturing workers in the USA, who delivered net output worth $167,000 each, produced more value more efficiently than their UK counterparts in 2023.

China leads the way

China’s manufacturers delivered net output worth $4.7 trillion in 2023, more than a quarter of the world’s $16.2 trillion total. Statista reports that 214 million people worked in China’s manufacturing sector in 2023, which gives the world’s largest manufacturing economy a per-worker productivity level of $22,000.

Chris Iveson, CEO at FourJaw Manufacturing Analytics, said: “Many of the world’s major manufacturing economies still produce more value in absolute terms than the UK, but they need many more people to do so. Only factory workers in the USA create more value more efficiently than those in the UK.”

“Our analysis shows that the value of productivity improvements achieved by UK manufacturing workers between 2018 and 2023 was better than those achieved in any other major manufacturing economy. But the reality is that manufacturers have only just scratched the surface of what is now possible on productivity.”

National Productivity Week, held last week, is a campaign by the Productivity Institute to improve UK productivity, which consists of a series of events to help businesses increase productivity through people development, emerging technologies, and finance and investment deployment.