Oxford Economics analysis of the value of manufacturing to the NI Economy
The Next Executive Must Raise Their Ambition to Reindustrialise our Economy
Manufacturing NI, today launched a detailed report on the economic contribution of manufacturing here and called on the next Executive to ‘raise ambitions and drive reindustrialisation of our economy’. The detailed report by Oxford Economics highlights the robust nature of the sector and its immense importance to the overall economy, but also outlines the historic opportunity which exists to see a step change in economic prosperity in the next decade.
It is clear from this Oxford Economics report that no other part of our economy delivers these outcomes more than the manufacturing sector…
- 214,000 direct and supported jobs, 1 in 4 of all jobs in the economy.
- A £9.9b total GVA contribution to GDP, around 30% of the economy.
- Productivity at £55,700 is 38% higher than NI average with advanced manufacturing contribution 27% more.
- Exports at £6b, almost two-thirds of all export sales.
- £254 million in R&D in 2014, accounting for over 60 percent of total business investment
- Attracting £900 million in FDI Between 2010 and 2014.
Speaking as the group launched its report, MNI Chief Executive Stephen Kelly said that Manufacturing NI would be single minded in ensuring that the positive, robust nature of the manufacturing sector is harnessed towards large scale job creation and economic investment in the next Assembly.
“Despite recent high profile problems, this report highlights the historic opportunity which the next Executive has to help create renewed economic prosperity. We believe that it’s possible and necessary for the Executive to work with the manufacturing sector to increase its contribution to 20% of GDP, narrowing the gap between north and south of the border. Through the implementation of a manufacturing strategy, the establishment of a target on competitive energy prices, continued stability on rates and a raising of ambition, the next Executive can create the conditions which will see this target met and transform communities across Northern Ireland. It can lead a re-industrialisation of our economy”.
Manufacturing accounts for a higher share of output relative to manufacturing in the UK as a whole. The sector also plays an integral role in supporting incomes and communities outside Belfast, as it is the largest employer in places like Mid Ulster and East Antrim, where it also accounts for over a quarter of all economic activity.
Manufacturing is also embedded into Northern Ireland’s economy. With its extensive supply chains it has links with almost every other sector in the economy. In addition to the direct jobs and growth manufacturing accounts for, the sector stimulates an additional £5 billion in economic activity, supports an additional 129,000 jobs, with wages of around £2.1 billion. Therefore, when manufacturing grows, the whole economy grows with it.
The Oxford Economics report highlights the positives and the challenges looking forward, but it is unequivocal in stating that if facilitated by government, the sector has the opportunity to benefit from global growth. It says that Northern Ireland will experience the fastest manufacturing growth in the UK, and that it is the largest source of export revenue in Northern Ireland, with sales reaching £6 billion in 2014, playing an important role in keeping the economy balanced. Strong GDP growth in Northern Ireland’s largest export market, the Republic of Ireland, as well as other significant markets in the US, Asia, the Middle East and Africa will provide strong demand for export goods over the forecast period.
Stephen Kelly says that setting out a clear ambition to arrest the differential between GDP contributions north and south of the border is essential in the next Programme for Government. Our local manufacturing sector currently contributes 14% yet, in the Republic of Ireland, it contributes some 23%.
“Historically we in Northern Ireland have seen ourselves as having an industrial heritage which can hold its head high on a global stage. However, there are lessons to be learnt on how why there is such a differential in GDP contribution north and south.
We have the ambition. We also have the new Department of the Economy committed to placing manufacturing at the centre of refreshed economic strategy and the election of a new First Minister with real experience of and commitment to manufacturing. Now is the time to be ambitious and create a prosperous, productive and positive economy delivering real tangigle outcomes for families across Northern Ireland”.
“As the curtain closes on the current Executive, and we prepare for election, it’s time to make sure that the next government of Northern Ireland builds on the strengths of our manufacturing sector. Northern Ireland was at the heart of the 19th century industrial revolution. We are poised and willing to go again. Let us collectively commit to reaching the EU’s 20% target, reindustrialise Northern Ireland and have an internationally envied and quickly growing economy based on well paid, highly skilled and regionally dispersed jobs.”
Neil McCullough from Oxford Economics said
“We were delighted to be asked to prepare an economic assessment of our diverse and important manufacturing base. We’ve all heard of the high profile demise of some of our traditional manufacturers in recent months, but what this analysis has uncovered is that a strong, vibrant and important manufacturing sector remains. It directly provides a significant volume of highly productive jobs meaning the sector is the second largest direct contributor to GDP. However its wider economic footprint is much larger. It is only when we consider the scale of the supply chain and consumer spending impacts that arise from manufacturing activity that we can appreciate our reliance on the sector.”