Have you ever heard someone say, “We don’t make anything anymore.”?
It’s easy to think that considering the news coming from the mainstream media, but it’s also not true.
The reality is that UK manufacturing remains one of the most important and high-impact sectors in the economy. And it’s not just being driven by giant corporations.
The real engine of UK manufacturing is small and medium-sized manufacturers (SMEs), and when you look at the data, it becomes clear that the sector is not only alive, but we’re punching well above our weight.
The UK is Still a Global Manufacturing Power
The UK is the 11th largest manufacturing economy in the world by output, (Make UK) which puts the UK in elite company among the world’s leading industrial nations.
It’s easy to imagine large OEMs and multinational assembly lines churning out products to reach this number, but in reality, the sector is made up of tens of thousands of SMEs all pulling their weight.
UK manufacturers tend to be focused on highly specialised and high-value production rather than low-cost mass manufacturing, and this is where SMEs excel.
SME’s Major Contribution to the Economy
Manufacturing accounts for around 10% of UK GDP, contributing approximately £220 billion in output.
A large portion of that value is created not just by the few big names you recognise, but by the large distributed SME supply chains filled with company names you’d never recognise.
SMEs form the backbone of complex supply chains that support larger manufacturers and exporters and for many SMEs they want to rise to the challenge, but this is where the challenge lies:
- Margins are tight
- Volumes fluctuate
- Labour is hard to secure
Jobs and Skills: the SME Hiring Challenge
UK manufacturing directly provides around 2.6 million jobs.
These jobs are typically higher-skilled, higher-productivity roles, with wages averaging around 8% higher than the national average.
Everyone in the manufacturing industry feels the skills shortage and recruitment pains, but SMEs feel labour pressure most acutely.
Large manufacturers can often absorb skills shortages or invest heavily in recruitment. SMEs don’t have that luxury. When they can’t find the right people with the right skills to hire:
- Orders get delayed
- Growth stalls
- Opportunities are missed
With around 48,000 manufacturing vacancies, the industry wants to grow, but without the right people we are stuck.
These roles are for subcontract machinists, food producers, system integrators, and packaging specialists, all parts of companies that rarely make headlines but collectively define the industry.
That 48,000+ vacancies isn’t just a statistic; it’s a daily operational and strategic problem for SME manufacturers.
A Critical Driver of Exports
Manufacturing is also responsible for approximately 42% of all UK exports.
This makes us one of the UK’s most important links to the global economy. UK manufacturing brings revenue into the country and supports trade balances.
And while large exporters get the visibility, most rely on networks of SME suppliers to deliver components, sub-assemblies, and specialist processes.
SMEs are a big part of what keeps the UK competitive on a global stage. They sit behind the scenes in supply chains, supporting larger manufacturers and exporters, even if they don’t always get the visibility. Take them out of the equation, and the UK’s export performance would look very different.
Investment: The SME Balancing Act
Manufacturers are responsible for around 17% of total UK business investment.
For SMEs, investment decisions are rarely straightforward. Every pound spent has to justify itself quickly, sometimes in as little as 12 months.
That creates a tension:
- Invest in productivity and industrial automation solutions → improved efficiency and growth, but committed capital
- Hold onto the cash → risk falling behind competitors
This is where many SMEs find themselves stuck: not lacking in ambition, but needing to manage the risk.
A Sector Facing Real Challenges
Here at OmnaTec, when we speak to customers, there is general optimism that the UK manufacturing sector is strong, but it is clear it is also under pressure.
And those pressures land hardest on SMEs:
- Labour shortages
- Cost increases
- Demand variability
- Skills gaps
This is exactly why people are asking about:
- Flexible industrial automation solutions
- Robotic automation solutions
- Scalable production / manufacturing automation systems
- ROI of productivity / process improvement
Increasingly, that means SMEs deploying cobots in manufacturing environments where hiring simply isn’t viable.
The Reality of UK Manufacturing
UK manufacturing is widely underestimated, but it isn’t disappearing; it is still:
- Globally competitive
- Export-driven
- Innovation-led
- A source of high-value jobs
However, it is evolving.
And that evolution is being driven by SMEs that are:
- Quick to adapt
- Pragmatic problem solvers
- Competitive with limited resources
If you want to understand the future of UK manufacturing, don’t just look at the biggest factories. Look at the SME supply chains that are making products which are more advanced, more valuable, and more important than ever.
Here at OmnaTec, we work with SME manufacturers who are navigating exactly these pressures: tight margins, hard-to-fill roles, and the need to justify every investment. If automation is on your radar, we can help you find the right approach for your operation. Talk to us today.
