A year that was dominated by political turmoil in the UK, Europe and the US had a heady mix of highs and lows for the manufacturing sector. In early 2016, manufacturing activity (as measured by the Purchasing Managers’ Index) broke several negative records. But later, while Brexit briefly knocked business confidence, industrial activity surged back in October and government measures to reassure Nissan – although the detail was unclear – seem to have settled nerves, with a comparatively solid finish to a rollercoaster year for the sector
Record car production: The Society of Motor Manufacturers and Traders
announces that more new cars were built in Britain in 2015 than in any of the past 10
years, with exports also very high. Total sales of UK-built cars rose 3.9 per cent to
1,587,677 units. (SMMT). But…. Makers stop marching: GDP figures for the last quarter of 2015 show manufacturing output 0.5 per cent below the level it was at when George Osborne gave his 2011 “march of the makers” Budget speech. The number of jobs in manufacturing has risen since 2011 by about 90,000, to 2.65 million, but is still below the pre-recession level. (BBC)
Exports forecast to slump: A British Chambers of Commerce survey of 7,500 firms finds that manufacturing fared worse than the services sector at the end of 2015 and was “close to stagnation” after export sales fell to below their pre-recession levels in 2007. Without government action to improve skills and upgrade outdated infrastructure, it says, “the UK economy could suffer negative consequences in the face of increasing global uncertainty”. (BBC)
Six out of ten EEF members against Brexit: Reseach carried out for manufacturers’ organisation the EEF by GfK finds 61 per cent of EEF members are in favour of remaining in EU. Opportunity to export is listed as main advantage of remaining. (Insider Media).
Qashqai ramps up: Production of the Nissan Qashqai in Sunderland rises, as the factory’s Line 2 is modified to build more units of the mass-market crossover. It will allow Qashqai production to increase from its current level of one car every minute – or 300,000 units annually. (Autocar)
Global manufacturing sector stalls: The JP Morgan-Markit global manufacturing purchasing manager’s index falls 0.5 points to 50.1 in April, the second-lowest reading in the past five years. (Business Insider).
Doubts over ‘wonder material’: A parliamentary inquiry into the UK’s efforts to commercialise graphene is putting the £61 million National Graphene Institute’s (NGI) progress under scrutiny. The inquiry is partly prompted by allegations in The Sunday Times newspaper in March. These included concerns that the NGI was not doing enough to protect valuable intellectual property around graphene. (Nature)
Worst month in three years: Britain’s factories suffer their worst month in three
years in April as falling export orders and a lack of domestic demand for consumer
goods squeeze manufacturing output. (The Guardian)
Growth in factory output has been on the slide for a year, but the manufacturing sector
contracts for the first time since March 2013. Economists believe the decline will drag on
GDP growth in 2016.
Sector limps back to growth in May: activity rises slightly in May, raising concerns over the economy’s strength before the European Union referendum. The Markit/CIPS manufacturing Purchasing Managers’ Index grows to 50.1 from 49.4 in April, which had been the lowest reading since early 2013.
UK votes to Leave: Referendum reveals 51.9 per cent of the voting public want the UK to leave the European Union, sparking mayhem in British and European politics and uncertainty in business.
Steel salvation: Tata Steel completes the sale of its long products business to Greybull Capital, in a deal that will preserve 4,400 UK jobs and revive the British Steel name. The business makes products such as railway tracks and steel used in construction. The sale includes steelworks in Scunthorpe, Lincolnshire, and sites in Teesside, Workington and York. The business also employs about 400 people in France. (The Guardian).
SoftBank buys ARM Holdings for £24 billion: Japanese internet and telecoms firm
SoftBank Group agrees to buy ARM holdings plc, the designer of microprocessors for smartphones, for £24.3bn. The deal positions SoftBank as a player in global ‘Internet of Things’ market. ARM does not manufacture but licenses its semiconductor technologies to chip manufacturers. A spokesman for the Prime Minister welcomes the prospective deal as “in the national interest”. (WSJ, FT)
Boeing and Government’s big deal: The government places order for nine new maritime patrol planes from Boeing in a 10 year deal worth £3bn, and with 2,000 new jobs to be created in the UK. The deal includes building a new £100m P-8A Poseidon facility at RAF Lossiemouth plus 50 Apache attack helicopters for the British Army. Boeing says UK suppliers will receive additional bidding opportunities on Boeing programmes. (Boeing UK)
GSK backs Britain post-Brexit as it invests £275 million to expand its UK factories: The pharma company, whose chief executive Sir Andrew Witty openly backed the EU Remain campaign, says the UK’s skilled workforce and competitive tax system helped it decide that Britain was “an attractive location” despite Brexit. GSK has invested a further £750m in new facilities over the past six years. (BBC)
Space Agency invests £4m in National Propulsion Test Facility: The UK Space Agency invests £4.12m in a rocketry research facility at Westcott, Bucks, a location with a strong history of propulsion research for defence and space development. Here UK researchers will test and develop space propulsion technologies. (The Engineer)
Hitachi to create 150 new jobs at North-East plant: Japan’s Hitachi says it will create a further 150 jobs at its train manufacturing facility at Newton Aycliffe,
County Durham. The company already employs about 500 people at the £80m site, where trains to run on lines in England and Scotland are being built. (BBC)
PMI shrinks to three-year low: Manufacturing activity contracts at its fastest pace for three years in July, as the Markit/ CIPS PMI drops from 52.4 in June to 48.2.
Pre- and post-referendum uncertainty is cited as the main reason for the fall. But for the quarter, The Office for National Statistics shows UK industrial output grew at the fastest rate for 17 years in April-to-June. Output grew 2.1 per cent compared to the first quarter of the year. (BBC)
Finally, green light for Hinkley Point C nuclear power station: PM Theresa May is accused by Labour and environmental groups of back-tracking on security concerns about Chinese involvement in nuclear power as she approves the £18 billion Hinkley Point C plant. The government insists the new plant in Somerset is only being approved with “new safeguards” to ensure that China and other foreign investors could not own stakes in
British nuclear plants without UK government approval. (The Guardian)
Bounce after Brexit: The sector bounces back strongly in August according to better-than-expected figures that boost hopes the economy will avoid a recession. The Markit PMI shows growth in Britain’s factories climbed to a 10 month high after going into reverse gear following the referendum. (Sky)
F&D sector to create 75,000 jobs by 2021: The food & drink sector forecasts 19 per cent growth over the next five years, according to a survey by Lloyds Bank Commercial Banking, an increase of 3 per cent from last year. The survey shows that 44 per cent of food manufacturers have increased their planned investment since the Brexit vote. (Food Manufacture)
British tea causes a stir in China: Tea growers in Britain say the 2016 crop has
produced tea of exceptional quality, so good that export volumes to China and Japan
have been higher than ever. (The Times)
Study proves link between engineering and economic development: A global study by the Centre for Economics & Business Research shows there is a strong positive correlation between the strength of engineering and economic development. The study claims it is the most comprehensive of its kind, fusing engineering data from 99 countries.
Sweden tops the new Engineering Index; the UK is ranked 14th on the Index, above the US, and India and Vietnam are identified as future engineering hotspots. (Royal Academy of Engineering)
Let’s talk? Apple and McLaren: Apple approaches McLaren Technology Group, the British supercar engineer and Formula One team owner, about a potential acquisition. Many read this as a sign that the iPhone maker plans to enter, and transform, the automotive industry. (Sky)
MG says it is to end UK car production: moves to China. MG says it will stop making cars at its Longbridge plant and will move production to China, ending manufacturing in the UK. It says in future cars would arrive “fully built, ready for distribution”. MG says there will be 25 redundancies, but sales, marketing and after-sales operations would remain at the plant. (BBC)
OCTOBER Jobs – lost and found:
• The UK Government commits £1.3 billion funding for Successor submarine programme
• Fracking in Lancashire is given go-ahead by government
• Thales picks UK for new plant to build “revolutionary” satellite engines
• 230 helicopter manufacturing jobs lost as GKN Yeovil plant closes
• 300 new manufacturing jobs in prospect with new 225,000 sq ft Magna International factory development, serving Jaguar Land Rover
• Bombardier to cut 7,500 more jobs through 2018, mostly in rail
• Nissan to build new models in Sunderland after post-Brexit deal (BAE Systems, BBC, The Daily Telegraph, Unite, Reuters)
NOVEMBER Autumn Statement: Outlook for wages is “dreadful” with the squeeze on pay lasting for more than 10 years, The Institute for Fiscal Studies says. Workers would earn less in real wages in 2021 than they did in 2008.
R&D push: Government will invest an additional £4.7 billion in research and development from 2017 to 2021, meaning an extra £2 billion a year by 2020. The 20 per cent increase comes after several years of flat science budgets. (Royal Society).
Electric vehicles: CEO Ralph Speth confirms Jaguar Land Rover’s ambition to build electric vehicles in the UK and sets out vision to double production of the business, which could create 10,000 jobs in the West Midlands. JLR says the ambition is “dependent on overcoming infrastructure and capacity issues”. (Sky)
Type 26 frigates work to start in summer 2017: Defence secretary Michael Fallon says the date for cutting the first steel would safeguard hundreds of skilled jobs at shipyards in Glasgow until 2035. (BBC)
HS2 “will open on time” in 2033: Transport Secretary Chris Grayling vows the Government’s controversial £56bn high-speed rail project HS2 will be completed on time. (BBC)
Engineers see 2 per cent pay rise year-on-year: EEF report shows engineering graduates take home £28,000 a year on average, 22 per cent more than average graduate pay. (www.imeche.org/news).