Manufacturers need support, says New Economy

Advanced manufacturing is key to Manchester's economic resilience although it will not generate employment growth, according to a new report.

The report, produced on Wednesday by New Economy, the strategic lead for economic growth in Greater Manchester, highlights how the area has a strong base of profitable, innovative and internationally competitive advanced manufacturers and said there are 38,000 employees within the sector in Greater Manchester, who account for almost a quarter of all advanced manufacturing employees in the UK.

New Economy said the findings of the report are being used to galvanise the efforts of the Greater Manchester local enterprise partnership, local authorities and the broader private sector on the next steps to take in order to continue employment growth and to reach the full potential of this sector.

The paper was researched and written by Alexander Roy, head of research at New Economy, and Alex Cole, senior economic analyst at the organisation. They concluded:

• Manchester has a higher number of employees within the advanced manufacturing sector than all UK comparator cities outside Birmingham, and has more manufacturers engaged in the most advanced forms of high-technology manufacturing than all other comparator cities outside London
• Advanced manufacturing is evidently an area in which Greater Manchester can compete globally. However, a large proportion of its advanced manufacturing companies are internationally owned and, with decision-making often taking place elsewhere, it is important to recognise the international nature of the sector
• Many of Greater Manchester's advanced manufacturers believe they face a distinct disadvantage to direct competitors in Europe, in terms of access to public sector support, grants, subsidies, growth assistance and premises
• The sector can offer important diversity for Greater Manchester's economy, significantly adding to its resilience and productivity, but it is unlikely to generate new net employment even in areas of the region where manufacturing remains the largest sector

Based on the reports findings, New Economy has devised a list of recommendations which will be used to advise government policies at a local and national level. The recommendations include:

• Creating a more "level playing field" by ensuring that the sector is less disadvantaged by the subsidies and incentives available to advanced manufacturing businesses in other locations within the European Union
• Improving the image of advanced manufacturing to attract a new generation of skilled workers
• Recognising that the premises and infrastructure needs of advanced manufacturers are different to those of large-scale manufacturers of old. There is a need for the evolving requirements of the manufacturing sector to be better understood by the planning system

Baron Frankal, director of strategy at New Economy, said: "This is an important report which scrutinises the pros and cons of one of Greater Manchester's crucial economic sectors. It shows that whilst profit and productivity has increased across the advanced manufacturing sector, this unfortunately does not correlate with employment in the sector – which is on the decline. The trend is reflected across the globe and is due to a number of factors such as improved technologies and precision engineering, which continue to reduce employment requirements."

Roy added: "In supporting this key sector, Greater Manchester's policy makers must be prepared to adapt to current global conditions to ensure that we nurture growth in the sector, so realising the potential for highly-skilled employment and the proven success of advanced manufacturing in terms of profitability, which can only have a positive effect on the region."