ADVANCED MANUFACTURING IN
GREATER MANCHESTER: SECTOR
PROFILE
NOVEMBER 2013
1
1
INTRODUCTION
Greater Manchester (GM) was the world’s first modern industrial city and the birthplace
of the industrial revolution. Whilst growth was initially driven by the textiles industry, the
city rapidly developed to lead the way in all areas of Britain’s global industrial might, with
the label ‘Made in Manchester’ being a byword for quality and innovation. While by the
1980s, Greater Manchester had become synonymous with deindustrialisation, the
conurbation still retains strengths in traditional manufacturing and logistics. The sector
remains a significant employer across the conurbation, with its 50,000 employees
representing 4.5% of total employment in Greater Manchester. It produced £2.4bn in
GVA for the conurbation in 2011, and £74.8bn nationally.
Large Greater Manchester sector employers include BOC Ltd, a distribution centre for
industrial gases in Manchester; NXP Semiconductors; Robert McBride Ltd, who supply
detergents and other household products in Rochdale; Mono Pumps Ltd, a global
manufacturer of progressing cavity pumps and pump parts in Manchester; and Whitecroft
Lighting, who develop lighting controls and energy saving lighting, among many others.
Defining which of these manufacturing activities are ‘advanced’ is not easy. There is no
straightforward way to define advanced manufacturing using statistics, since it is not
simply a distinct sector, but rather an approach to manufacturing. For example, a lowtech product could be produced using advanced manufacturing techniques, whilst a hitech product might simply be being assembled or localised in Greater Manchester in a
low-value way. Previous research published by the OECD has looked at trends in
medium and high-tech manufacturing, which aligns closely with how the advanced
manufacturing sector is defined. Using this work as a starting point, advanced
manufacturing has been defined as follows:












Manufacture of electric motors, generators, transformers and electricity
distribution and control apparatus (SIC code 27)
Manufacture of batteries and accumulators (SIC code 27)
Manufacture of wiring and wiring devices (SIC code 27)
Manufacture of electric lighting equipment (SIC code 27)
Manufacture of domestic appliances (SIC code 27)
Manufacture of other electrical equipment (SIC code 27)
Manufacture of medical and dental instruments and supplies (SIC code 325)
Manufacture of chemicals and chemical products (SIC code 20)
Manufacture of basic pharmaceutical products and pharmaceutical preparations
(SIC code 21)
Manufacture of computer, electronic and optical products (SIC code 26)
Manufacture of machinery and equipment not elsewhere classified
(SIC code 28)
Manufacture of motor vehicles, trailers and semi-trailers (SIC code 29)
2



2
Manufacture of other transport equipment (SIC code 30)
Repair and installation of machinery and equipment (SIC code 33)
Engineering activities and related technical consultancy (SIC code 7112)
DEMAND FOR SKILLS IN ADVANCED MANUFACTURING
Business Base
The Inter-Departmental Business Register (2012) reports there are nearly 3,200
advanced manufacturing businesses within Greater Manchester, representing 4.5% of
Greater Manchester’s total business base
Almost half (42%) of these businesses work in relation to engineering activities and
related technical consultancy. The manufacturing of machinery and equipment and the
manufacturing of computers, electronics and optical products are also important subsectors.
Table 1 – Number of Greater Manchester businesses in advanced manufacturing, 2012
Sub-sector
Engineering activities and related technical consultancy
Manufacture of machinery and equipment n.e.c.
Manufacture of computer, electronic and optical products
Manufacture of chemicals and chemical products
Repair and installation of machinery and equipment
Manufacture of electrical equipment
Manufacture of motor vehicles, trailers and semi-trailers
Manufacture of medical and dental instruments and supplies
Manufacture of other transport equipment
Manufacture of basic pharmaceutical products and
pharmaceutical preparations
Total businesses
Source: IDBR, 2012
No of businesses
% sector
1,350
447
415
229
198
190
148
89
70
43
14
13
7
6
6
5
3
2
26
1
3,162
The sector is characterised by full-time employment with 91% of employees working full
time, compared to 72% across all sectors in Greater Manchester.
Key Employment Sub-Sectors
Advanced Manufacturing employs 51,600 people in Greater Manchester, representing
4.5% of total employment in Greater Manchester.
Nearly half of those employed in advanced manufacturing companies (44%) work in firms
that employ 50-249 people. A further 27% work in companies employing 10-49 people,
3
Only 15% work in companies employing 250+ people and 14% work in companies with
1-9 employees.
As with numbers of businesses and employees, ‘Engineering activities & related
technical consultancy’ is the largest sub-sector in employer terms with 13,400 jobs. Civil,
mechanical, electrical, electronic and chemical engineering skills present across the
manufacturing, construction and utilities sectors are matched by a complementary
concentration of consulting engineering businesses. These support the manufacturing
and energy sectors as well as investment in infrastructure – both domestically and from
an exports perspective. Greater Manchester is also home to a large concentration of
machinery and equipment manufacturing, employing 9,300 people as well as chemicals
manufacturing, employing approximately 9,000 individuals.
Table 2 – Advanced Manufacturing employees in Greater Manchester by sub-sector, 2011
Sub sector
Engineering activities and related technical consultancy
Manufacture of machinery and equipment n.e.c.
Manufacture of chemicals and chemical products
Manufacture of computer, electronic and optical products
Repair and installation of machinery and equipment
Manufacture of electrical equipment
Manufacture of other transport equipment
Manufacture of basic pharmaceutical products and
pharmaceutical preparations
Manufacture of motor vehicles, trailers and semi-trailers
Manufacture of medical and dental instruments and supplies
Total employees
Source: Business Register & Employment Survey, 2012
Employees in GM
13,400
9,300
8,600
6,100
3,800
3,700
2,600
% Sector
26
18
17
12
7
7
5
1,300
3
1,900
900
51,600
4
2
4
Geographic Distribution
Advanced manufacturing activity is focused to the south of the conurbation, with
Manchester, Stockport, Trafford, Salford and Tameside accounting for almost two thirds
of total advanced manufacturing employment in Greater Manchester.
Figure 1 – Advanced Manufacturing employees across Greater Manchester districts, 2011
BURY,
WIGAN, 3,000, 6%
3,700, 7%
MANCHESTER
9000
17%
ROCHDALE,
4,100, 8%
BOLTON,
4,400, 8%
TOTAL GM
ADV. MANU.
EMPLOYEES:
51,600
OLDHAM,
4,500, 9%
TAMESIDE,
4,600, 9%
STOCKPORT
7,100
14%
TRAFFORD,
6,000, 12%
SALFORD,
5,100, 10%
Source: Business Register & Employment Survey, 2012
Forecasts
Growth forecasts for advanced manufacturing in Greater Manchester are drawn from the
Greater Manchester Forecasting Model (GMFM) produced by Oxford Economics. The
model gives an overview of the sector’s growth potential over the coming decade. The
data shows that the trend for declining employment in all manufacturing is projected to
continue over the coming decade, though this trend is less marked for advanced
manufacturing. While manufacturing as a whole is projected to decline by 7% in
employment terms to 2022, only a 2% decrease applies to advanced manufacturing
during the same period. In Greater Manchester as a whole, employment is forecast to
rise by 7% (91,900 jobs).
5
Figure 2 – Manufacturing employment forecasts in Greater Manchester, 2000-2022
200
EMPLOYMENT (thousands)
EMLOYMENT FORECAST
160
120
OTHER
MANUFACTURING
80
FOOD & DRINK
MANUFACTURING
40
ADVANCED
MANUFACTURING
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Source: Greater Manchester Forecasting Model, 2012
However, whilst manufacturing has seen employment decline over the last decade,
labour productivity in the sector has grown rapidly. The key reason for this trend is the
rise in the shift to less labour intensive processes, as well as the utilisation of more
capital intensive techniques and an increasing focus on research, design and after-sales
services1. Over the ten years from 2012 – 2022 the Gross Value Added (GVA)
contribution of Greater Manchester‘s Advanced Manufacturing sector is forecast to
increase by £637m (26%). The GVA of Greater Manchester as a whole is forecast to
increase by £14.6bn (31%) over the same period.
GMFM forecasts that the trend towards increased demand for higher level skills looks set
to continue over the next decade: forecasts indicate that of the 5,000 jobs due to be
created over the next decade in manufacturing (due to retirements and labour market
mobility, as well as growth), a fourth (23.6%) will require skills equivalent to NVQ Level 4,
and half will require skills equivalent to NVQ 3 and above, though the data also shows
that the sector will continue to offer lower level opportunities (NVQ Level 2).
Table 2 – Net requirement per annum in manufacturing by skill level in Greater
Manchester, 2012-22
Aviation
Automotive
Manufacturing
All manufacturing
Total in Greater Manchester Economy
Source: Oxford Economics (2011)
NVQ0
NVQ1
NVQ2
NVQ3
NVQ4
TOTAL
84
181
338
603
159
207
413
779
186
410
578
1,174
178
418
721
1,317
154
285
758
1,197
761
1,501
2,808
5,070
11,307
13,901
22,897
22,641
21,388
92,134
1
The Work Foundation (March 2011): More than making things: A new future for
manufacturing in a service economy
http://www.theworkfoundation.com/research/publications/publicationdetail.aspx?oItemId=284
6
3
SUPPLY & PROVISION OF SKILLS
This section reviews data on the number of apprentices, further education and higher
education students who live in Greater Manchester and who are studying Advanced
Manufacturing sector related courses. It aims to give an indication of the potential supply
of skilled labour to the sector. However, when reviewing the following data the following
caveats should be noted:
1. A person’s subject of study is not necessarily an indicator of their future
employment occupation;
2. Many Greater Manchester learners are studying for academic qualifications (e.g.
history, geography) which could make them suitable for employment in a range of
sectors – these learners are not included in the analysis;
3. Across the relevant datasets up to 10% of learners have their study subject listed
as unknown – these learners are not included in the analysis;
4. The latest available data on 16-19 year old and Higher Education students is less
current (2011/12) than the latest available data on 19+ and apprenticeship
students (2012/13); and
5. There is no official line on which subjects of study are directly relevant to which
sectors of the economy, therefore New Economy has had to make a judgement
on which subjects and apprenticeship frameworks map to which sectors – detail
on this mapping exercise is provided in an appendix to this report.
Thus the figures presented are indicative of the pool of labour from which the sector
could recruit.
16-19: Further education (FE) and school sixth forms
During the 2011/2012 academic year, there were a total of 2,527 starts in advanced
manufacturing related subjects across FE and sixth form colleges in Greater Manchester.
The most popular subject area was ‘engineering’, with the vast majority (81%) of starts in
this area. Some 55% of course starts were provided at Level 2 or below, the remainder at
Level 3.
Table 3 – Number of relevant courses delivered in FE and sixth form colleges 2011/2012
Engineering
Engineering and Manufacturing Technologies
Manufacturing Technologies
TOTAL
Entry Level
Level 1
Level 2
Level 3
Level 4
Other Level
TOTAL
-
422
3
52
477
719
28
166
913
908
-
-
2,049
31
447
2,527
229
1,137
Source: Education Funding Agency, 2012
Education Funding Agency data show that over three academic years, 2009/10-2011/12,
starts in advanced manufacturing-related subjects grew by 1.4%, compared to a much
higher rate of growth (13%) in the ‘all subjects’ start number.
7
The gender split of these starts shows that starts in advanced manufacturing related
courses are heavily male-dominated, with all starts over the three-year period
constituting 91 % male and 9% female. This balance compares to that of all subjects,
which over the same period were 51% male and 49% female. Data for the last three
academic years shows no narrowing of the gap between male and female starts.
The ethnic makeup of starts over the period has been largely dominated by white British
individuals, at 51% of all starts. Asian or Asian British constitutes 6.8%, with the
remainder split relatively equally at low percentages. This is mirrored by the split seen
for in the all course averages, with white British constituting 46.0% and Asian or Asian
British 8.7%.
Full time, full year courses are the most common mode of study, with 91% of starts in this
category (88% for all courses). Next most popular is part-time other, including e-learning
at 8% (8% for all courses). Part time, full year courses constitute 1% of starts (4% for all
courses).
Across Greater Manchester’s ten local authorities, the starters’ home address has been
relatively evenly split over the period, with 14% being the highest proportion across the
period (Manchester and Stockport). The next highest proportion was 12% (Rochdale),
then 11% (Oldham and Tameside, respectively). For all courses, this split is less even,
with 20% of starts resident in Manchester and the next highest being 11% (Wigan) and
10% (Bolton, Oldham and Stockport respectively).
Over the period, the top five Education Funding Agency (EFA) providers delivering
advanced manufacturing related courses in descending order were:





Bury College
Hopwood Hall College
Trafford College
The Manchester College
Tameside College
Adult (19+) Skills
apprenticeships)
Funding
Agency
(SFA)-funded
provision
(excluding
In 2012/13 the SFA funded just under 4,400 in advanced manufacturing training starts by
Greater Manchester residents aged 19 and over. Three sector subject areas account for
the lion’s share of these learner starts:

Engineering – 3,100

Engineering & Manufacturing Technologies - 130

Manufacturing Technologies – 1,100
8
SFA funded provision to the sector has declined by 35% over the past five years, a larger
decrease than that seen across all sectors (8%).
Looking in more detail at the types of residents on these courses shows that:

SFA funded learners are evenly split between males and females;

A clear majority (82%) are studying at Level 3 and above – this is a lot higher than
the all sectors figure of 41%.
Table 4 - Level of study by Greater Manchester residents of SFA funded Advanced
Manufacturing courses, 2012/13
Level
Level 1 & Entry
Level 2
Level 3
Level 4+
Source: SFA, 2012/13
Advanced
Manufacturing
All sectors
0%
14%
50%
32%
10%
20%
20%
21%
The largest providers of advanced manufacturing sector training in Greater Manchester
by number of SFA funded starts include:




Tameside College;
Manchester College;
Bury College; and
Wigan & Leigh College.
Apprenticeships
The latest data shows that in 2012/2013, there were 330 apprenticeship starts by Greater
Manchester residents within frameworks related to advanced manufacturing. Two thirds
(66%) of these starts were made in ‘electrotechnical’ apprenticeships, followed by 27% of
starts in ‘rail engineering’.
There has been a 65% decline in apprenticeship starts within the sector from 2008/09,
compared to a rise of 124% in apprenticeship starts across all sectors in Greater
Manchester during the same period. The twin causes of this decline appear to be
significant reductions in Greater Manchester’s numbers of engineering and rail transport
engineering apprenticeship starts.
The majority (71%) of advanced manufacturing apprenticeship starts are at the advanced
level (level 3), with most of these taking place in ‘electro-technical’ apprenticeships. The
sector exhibits a huge gender imbalance, with the vast majority (98%) of starts by males,
compared to 46% for all apprenticeships as a whole. Apprenticeships are also mainly
taken up by young people under 25 years (91% in 2012/13 - with 57% between 16 and
18 years, and 34% 19 to 24 years). This reflects a fairly consistent trend since 2008/09.
9
Age Groups
Apprenticeship
starts 2012 / 2013
(total number)
Under 19
19-24
25-30
31-49
50-64
65+
Total Number
189
112
12
13
4
0
330
With regards to apprenticeship providers, JTL, Wigan & Leigh College, Economic
Solutions and Bury College are the largest providers.
Higher Education (HE)
Greater Manchester is home to four universities (the University of Manchester,
Manchester Metropolitan University, University of Salford, and the University of Bolton)
who collectively have more than 100,000 students and almost 30,000 graduates each
year.
There were roughly 9,000 HE students across Greater Manchester studying advanced
manufacturing-related subjects during the 2010/2011 academic year. About 40% of these
studied engineering & technology subjects, followed by 24% who studied biological
sciences.
Table 5 – Number of students studying science & technology-related subjects in Greater
Manchester HE institutions, 2010/2011
SUBJECT
BIOLOGICAL SCIENCES
UNIVERSITY OF
BOLTON
UNIVERSITY OF
MANCHESTER
MMU
UNIVERSITY OF
SALFORD
TOTAL
195
870
695
330
2,090
PHYSICAL SCIENCES
0
935
280
125
1,340
MATHEMATICAL SCIENCES
15
455
50
15
535
COMPUTER SCIENCE
130
510
320
345
1,305
ENGINEERING & TECHNOLOGY
410
1,850
640
580
3,480
TOTAL
750
4,620
1,985
1,395
8,750
Source: Higher Education Statistical Agency (2011)
10
4
SECTOR SKILLS ISSUES
Summary of literature
The UK Commission for Employment and Skills (UKCES)2 has researched the key skills
issues facing the advanced manufacturing sector. It found that the speed of change is
increasing and forcing supply chains to become more like supply networks requiring
higher levels of flexibility, agility and a broader spread of soft skills across the workforce.
It is likely that in the future higher levels of employee responsibility, autonomy and
managerial delegation will be required at all levels in the organisation. This is driving up
the need for higher skill levels in manufacturing.
UKCES found a shift away from skilled trades and process and machine operatives
towards managers, professional, and associate and technical occupations resulting in a
higher demand for skills from the sector. In particular, the sector has and will continue to
have a strong demand for people with Science Technology Engineering and
Mathematics (STEM) skills. However, due to retirements, the sector will have a continued
demand for people trained to Level 3 (typically via Apprenticeships).
The sector is thought to be well supported by an extensive initial and continuing
vocational education and training infrastructure with a substantial increase in the number
of people being qualified each year in the subjects and skills upon which the
manufacturing sector is dependent.
In the advanced manufacturing sub-sector the supply-side often has to run very fast in
order to keep pace with technological developments on the demand side. Accordingly,
employers at the cutting-edge may need to look internally to develop the skills they
require.
Key skills deficiencies relate to professional and senior managers and their ability to
adequately research the drivers of change to enable them to develop effective product
market strategies.
Accessing skills and training was identified by the Government’s Growth Review
Framework for Advanced Manufacturing (2010)3. The fast-moving nature of
manufacturing, and the often cross-cutting skills needed, can make it difficult to identify
suitable training and where it can be found. There is a significant skills shortage in
sectors such as science, engineering and technology that could partly be addressed by
better retention of skilled workers and tackling the gender imbalance.
2
UKCES (2012) Sector Skills Insights: Advanced Manufacturing, available at:
http://www.ukces.org.uk/assets/ukces/docs/publications/evidence-report-48-advanced-manufacturing.pdf
3 Growth Review Framework for Advanced Manufacturing. BIS, December 2010
11
Future trends, barriers to growth and opportunities
According to UKCES, the principal challenge facing the advanced manufacturing sector
is the rapid pace of technological development which is taking place on a global scale.
The challenge for the sector is to capture and retain a leading share of the high value
added segment of the global market in manufacturing. The evidence points to the high
value added segment being in the research and development (R&D) of new products and
processes, design for manufacture, and the manufacture of relatively complex products.
Even where manufacturers are engaged in high volume rather than niche production
there is a need to ensure that they possess the product market strategies which will allow
them to prosper in this segment of the market and make a significant contribution to the
overall value-added to the economy4.
The Institute for Manufacturing (IM) and the Technology Strategy Board (TSB) 5 have
identified several drivers for growth in the advanced manufacturing sector. These
include:
 Rising Production Costs in Asia: As economic development gathers pace in the
major manufacturers in the developing world (particularly China and India), the
population of these countries is increasingly demanding better pay and conditions
from work. This has resulted in a significant reduction in the cost-savings for UK
companies that locate their manufacturing operations in these countries.
 Growing demand for products using advanced manufacturing: Complex
goods which require high tech manufacturing processes are becoming increasingly
popular across a range of markets. From luxury electronic goods to products for the
low carbon economy, products that require advanced manufacturing are seeing a
growth in sales.
 Increasing resource scarcity: This will require production processes to minimise
the use of raw materials and energy, creating an incentive for high tech, efficient
manufacturing techniques.
4
UKCES, Sector Skills Insights: Advanced Manufacturing. Evidence Report 48, July 2012
Institute for Manufacturing and TSB, A Landscape for the Future of High Value Manufacturing in the UK,
2012
5
12
In addition to growth drivers identified by the IM and TSB, the Government has outlined
four key trends in the global economy where there are significant opportunities for UK
manufacturing6:
 Growing global markets: With consumers increasingly looking for high tech,
quality products. This is particularly the case in Brazil, Russia, India, China
(BRICs), but also in other emerging geographical markets. Demographic changes
(including ageing populations) and the rise of the middle class in developing
countries are likely to generate new demand for more sophisticated medical
devices, instrumentation and delivery of healthcare.
 Low Carbon and Environmental Market Opportunities: With opportunities in
areas particularly related to low carbon, green technology, environmental and
energy efficiency.
 The use of new technologies: New approaches to increase productivity, for
example through increased use of ICT and digital in manufacturing processes and
products, and the exploitation of new industrial technologies is a significant
opportunity.
 New business models: With the rise of services as a key revenue stream for
manufacturing, and the trends towards new business models based around new
production processes.
In order to capitalise on growth opportunities such as those outlined above, the
Government has identified a number of barriers that must be addressed7. These include:
 Accessing skills and training: The costs of training and skills can be high,
particularly in specialised areas of manufacturing technologies. The fast-moving
nature of manufacturing, and the often cross-cutting skills needed, can make it
difficult to identify suitable training and where it can be found. There is a significant
skills shortage in sectors such as science, engineering and technology (SET) that
could partly be addressed by better retention of skilled workers and tackling the
gender imbalance.
 Innovation and knowledge transfer: Knowledge of the latest industrial
technologies and their application to manufacturing processes is often difficult to
access, particularly for SMEs. Information is often contained within a particular
sector, and not disseminated widely across sectors where it could also be
beneficial.
6
7
Growth Review Framework for Advanced Manufacturing. BIS, December 2010
Growth Review Framework for Advanced Manufacturing. BIS, December 2010
13
 Take up of new technologies: The costs of demonstrating and testing the use of
new technologies can be very high, particularly for SMEs, and can require access
to equipment beyond the affordability of an individual company. Firms often lack
knowledge about the range of technologies that are available and their potential
benefits.
 Access to finance: Some investment projects involving manufacturing can be
hampered by difficulties obtaining appropriate and affordable finance, especially at
the initial design, development and demonstrator phases of the innovation
processes.
 Exporting: Businesses looking to export may experience difficulties gaining access
to networks and contacts in overseas markets, accessing markets due to trade
barriers, navigating unfamiliar business environments, handling intellectual
property, and operating in different legal and regulatory frameworks.
 Regulatory issues: Modern manufacturing often involves a complex system of
operations – from production to end of life disposal – each of which is impacted by
legal and regulatory frameworks, both in the UK and in other countries.
 Energy costs and security of supply: Many UK advanced manufacturing firms
are within or closely related to energy intensive industries that depend on
manageable energy costs and security of supply to remain globally competitive.
The higher costs of transportation and the need to reduce carbon emissions also
create barriers.
14
Appendix A: Definitions used to produce this report
SIC Codes
 Manufacture of chemicals and chemical products (SIC code 20)
 Manufacture of basic pharmaceutical products and pharmaceutical preparations
(SIC code 21)
 Manufacture of computer, electronic and optical products (SIC code 26)
 Manufacture of electrical equipment (SIC code 27)
 Manufacture of machinery and equipment not elsewhere classified
(SIC code 28)
 Manufacture of motor vehicles, trailers and semi-trailers (SIC code 29)
 Manufacture of other transport equipment (SIC code 30)
 Manufacture of medical and dental instruments and supplies (SIC code 325)
 Repair and installation of machinery and equipment (SIC code 33)
 Engineering activities and related technical consultancy (SIC code 7112)
Tier 2 subject areas
 Manufacturing Technologies
 Engineering
 Engineering and Manufacturing Technologies
Apprenticeship Frameworks
 Automotive Industry
 Electrical & Electronic Servicing
 Electro-technical
 Engineering
 Marine Industry
 Process Technology
 Process Manufacturing
 Rail Engineering (Track)
 Rail Transport Engineering
 Transport Engineering And Maintenance
15