The manufacturing industry had some of the biggest job losses across the UK economy last year

 
Rebecca Smith
Car manufacturing bucked the trend with a seven per cent rise in job creation
Car manufacturing bucked the trend with a seven per cent rise in job creation (Source: Getty)

The UK manufacturing industry recorded some of the biggest job losses last year, impacted by international competition and technological advances.

According to accountancy group UHY Hacker Young, the industry had some of the biggest job losses of all sectors across the UK economy. Out of 69 sectors measured for job creation, manufacturing made up three of the worst five areas for percentage change in employment numbers last year.

The production of chemicals recorded a 12.9 per cent decrease in employment numbers, from 101,000 to 88,000 and trailed in last place out of the 69 sectors, while the manufacturing of computers didn't fare much better in 67th place. That had a 11.5 per cent drop in jobs, while pharmaceutical manufacturing had a 9.8 per cent decrease and came in 66th.

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UHY Hacker Young said the droop in numbers could be attributed to the ongoing shift in manufacturing to places where labour costs are lower, such as China and Vietnam. Additionally, the rise of technological innovation in these sectors also had a role to play in reducing the number of jobs available, with machines taking over some duties previously manned by people.

According to the Office for National Statistics, manufacturing output overall fell by 0.9 per cent during the third quarter.

Percentage change in employment numbers among some of the best sectors and the worst
Percentage change in employment numbers among some of the best sectors and the worst (Source: UHY Hacker Young)

Paul Daly, partner at UHY Hacker Young, says: “Although the weaker pound should make exports cheaper, the fall in output last quarter for manufacturing overall is a worrying sign that the full effects of the Brexit vote are yet to be realised.”

It wasn't bad news across the board though - car manufacturing bucked the trend with a seven per cent increase in job creation, from 142,000 last year to 152,000 in 2016. Some 13 per cent more cars were manufactured in the first six months of the year, compared to the same time in 2015.

Read more: Wage increases threatened by slowing UK productivity growth

Confidence in the manufacturing sector dropped last month, with the weak pound putting pressure on manufacturers buying materials from abroad.

The purchasing managers' index (PMI) fell 0.8 points to 53.4, marking the second month of decline in confidence, though PMI remained above the neutral 50 marker. So sentiment's currently still fairly positive.

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