Reports over the weekend suggest chancellor ready to ‘reset’ the public finances with programme of investment in transport and infrastructure
Britain’s manufacturers insisted they have a crucial role to play in a post-Brexit world, contributing $247bn (£190bn) a year to the economy and creating well-paid, high-value jobs.
The UK is the world’s ninth-largest industrial nation and manufacturing accounts for 14% of business investment according to a report by the sector’s trade body, called EEF, and Santander.
But it comes at a time of huge uncertainty for manufacturers, with companies intending to cut investment in new plant and machinery to its lowest level since the financial crisis according to a survey published by EEF earlier this month.
Lee Hopley, chief economist at EEF, said: “Given the importance of manufacturing to the economy it’s vital that we educate all stakeholders about its real value and contribution to growth. This is especially important in a post-Brexit world where we have to look at all new avenues of generating growth and investment.”
As chancellor Philip Hammond prepares to deliver his maiden autumn statement on 23 November, the group has called for an ambitious industrial strategy to make the UK an appealing proposition for future manufacturing investment.
Hammond is expected to announce a programme of investment in transport and other infrastructure projects to give the economy a post-Brexit-vote boost.
Reports over the weekend suggested Theresa May has instructed the chancellor to extend the northern powerhouse initiative – conceived by his predecessor in number 11, George Osborne – to other UK regions.
Hammond has already signalled that he is willing to “reset” the public finances to support the economy, abandoning Osborne’s target of returning to a surplus of £10.4bn by 2019-20.
It is hoped that Britain’s factories will be able to capitalise on the sharp fall in the value of the pound since the UK voted to leave the EU. A weak pound makes British goods cheaper abroad, potentially boosting exports.
EEF said Britain is having an industrial renaissance, with manufacturers creating jobs at a faster rate than any other country apart from the US since 2010. The sector’s average annual earnings of about £31,500 are almost £4,000 above the figure for the whole economy, it added.
London and the south-east are the biggest manufacturing regions, just ahead of the north-west and the midlands.