National Manufacturing Day: why UK manufacturing matters

By Dr Jennifer Castañeda-Navarrete

Today, the UK marks National Manufacturing Day, with manufacturers across the country opening their doors to showcase the wide range of high-quality, well-paid, and increasingly technology-driven career opportunities the sector offers.

It is also an opportunity to recognise that manufacturing is not just a part of Britain’s industrial heritage, but a crucial element of its sustainability, competitiveness, and resilience. Manufacturing is the sector that transforms ideas into products, drives exports, and supports high-quality jobs throughout the country.

In this article, which draws on findings from the UK Innovation Report 2025, we highlight how manufacturing continues to boost the UK economy as a foundation for future prosperity.

A shifting economic landscape

One of the most notable changes in the structure of the UK economy since 2000 has been the decline in the share of manufacturing value added, from 14.8% in 2000 to 9.1% in 2023. Over the same period, industries such as human health and social work, professional, scientific and technical activities, and financial services expanded their share of the economy (Figure 1).

However, despite its reduced share, manufacturing remains the second-largest sector by value added, the largest contributor to capital investment, the second in labour productivity growth, and the seventh-largest employer. In other words, while manufacturing’s relative weight has diminished, its absolute economic importance remains robust.

Manufacturing provides salaries above the whole-economy median and stands out as one of the UK’s strongest drivers of productivity. Between 2000 and 2023, the sector achieved annual productivity growth of 3.0%, significantly outpacing the gains recorded in many other industries. In addition, advanced manufacturing, which accounts for roughly half of the sector’s value added, consistently demonstrates productivity levels above those of the rest of UK manufacturing and the UK economy (Figure 2).

Manufacturing is also central to trade and innovation. In 2023, the sector was responsible for 89% of goods exports and nearly half (48%) of all business expenditure on research and development (BERD), accounting for £24 billion (Figure 3).

Leading manufacturing industries

Some industries play a particularly important role in UK manufacturing and the economy more broadly (Figures 4 and 5). For example:

• Food products. The largest employer and biggest contributor to manufacturing value added.
• Motor vehicles and other transport equipment. Highly export-oriented, jointly accounting for a quarter of manufacturing exports, while also contributing significantly to value added and employment.
• Pharmaceuticals. A standout for high value added, the largest capital and R&D investment share and, and a substantial role in services exports.
• Machinery and equipment and fabricated metals. Strong contributors across exports, value added, and employment.

Together, these industries illustrate the diversity of UK manufacturing, from everyday consumer goods to advanced technology and research-driven innovation.

The wider economic impact

The manufacturing sector’s true economic value extends well beyond its direct contribution to value added. Taking a value chain perspective, manufacturing accounted for approximately £331 billion in 2022 and supported around 4.5 million full-time equivalent jobs in 2019, which represented around 15% of the UK economy (Figure 6). The largest indirect impact of manufacturing in value added and employment is seen in distribution and logistics, business services, and materials and infrastructure.

Final reflections

As we have highlighted in previous reports and published commentary, manufacturing remains one of the UK’s most vital economic sectors, driving investment, exports, productivity, and innovation, while sustaining millions of jobs across the country.

When viewed in its full context, the figures speak clearly: manufacturing contributes nearly 15% to the UK economy through its broader value chain, accounts for almost half of all business R&D, and drives some of the strongest productivity growth of any sector. These figures serve as a reminder of how vital manufacturing is to the UK economy.

This article draws from Sections 1 and 2 of the UK Innovation Report 2025.

For data and more analysis on the UK’s competitive advantage in industrial innovation, see the full UK Innovation Report 2025 produced by Cambridge Industrial Innovation Policy.