Economic performance of the UKs motor vehicle manufacturing industry
By: Tamir Davies
Last updated: 01 September 2015
The motor vehicle manufacturing industry is the third largest industry in the UK alone, surpassed by the manufacturing of food and metal products.
A new report released by The Office of National Statistics (ONS) has evaluated the output in the motor vehicle industry and how it has changed over time. As the new ‘65’ number plate registrations are released, the economic performance of the UK’s industry is of significance.
Its output, measured by gross value added (GVA) has shown the industry to have contributed £12billion to the UK economy in current prices in 2014, accounting for 8% of total manufacturing (GVA). Technical innovation and the rate at which the industry is developing can be seen through the number of people employed which was 141,500 in 2013; 6% of total manufacturing industry employment.
Data has shown that despite a small reduction in output in 2000, the general output for the industry between 1997 and 2007 appeared fairly stable as shown by the graph below. However, with the economic downturn 2008-9, output shrunk by 49% between Jan-March 2008 and Jan-March 2009. Despite its disastrous recession, the industry on a whole has experienced a strong recovery with output growing by an average quarterly rate of 3.1% between Jan-March 2009 and April-June 2015.
Data was collected and published by Annual Business Survey (ABS), showing the industry’s turnover to have reached £60.6billion in 2013, accounting for 12% of the overall manufacturing industry’s turnover. Data representing turnover is presented by regions in the UK and had shown that the majority of the industry’s activity was concentrated inside England (93%). The West Midlands had the highest regional turnover, which was £17.6billion and just under a third of the industry’s UK total. Followed closely behind was London, South East and the North West of England.
Exports and imports have increased over the period of 2008-14 and the value of the UK motor vehicle imports has been higher than the value of exports, which stood at £5.5billion in 2014, the highest deficit since 2007. The majority of imports from the EU is 85% of total imports each year since 1998 and has grown from £14.3billion to £31.3billion between 1998 and 2014. This contrasts with imports from non-EU countries, where growth can be seen at £2.2billion to £4billion over the same period.
Exports on the other hand are noticeably different with exports to non-EU countries growing a lot faster than exports to EU countries. The share of total motor vehicle manufacturing exports to the EU has fallen to 40%, whereas exports to non-EU countries has grown from £2.9billion to £17.9billion from 1998 to 2014. This contrasts statistics gathered for exports to EU countries which have only grown from £8billion to £11.9billion over the same period.