UK manufacturing: Global growth and European challenges

James Appleby

Managing Director, DG International

COVID-19 industry recovery. It’s a term we hear a lot, but in manufacturing, we are certainly seeing signs that this is happening, particularly in the UK.

With businesses having been able to reopen – if only in a limited way – from May and June, there was a surge in activity as new orders flooded in, keen to get the economy moving once more. How is the logistics industry supporting this growth, and how will Brexit impact the growth of UK manufacturing?

The past three months in UK manufacturing

In August, UK manufacturing output expanded at its fastest rate since May 2014, a result of businesses reopening following COVID-19 lockdowns. A sharp increase in new orders, not seen since November 2017, played a big part in this, with orders coming not just from within the UK, but also EMEA, North America and Australia, taking advantage of borders reopening. However, this growth has not been matched in sector employment, as job losses were recorded for the seventh month in a row.

By September, the UK government announced that it would provide £300 million in funding to businesses with creative ideas to boost manufacturing capabilities. This investment is set to give a crucial lift to the aerospace, automotive, and food and beverage sectors as the UK builds back from the pandemic.

This month, The Guardian reported that global manufacturing growth was at a two-year high, another nod towards COVID-19 recovery. This claim was made by JP Morgan, which examined the latest manufacturing Purchasing Managers’ Index (PMI) reports from the UK, eurozone, US and Asia. The investment bank company found that both output and new orders rose for the third month in a row, and new export business grew for the first time in more than two years.

How we can support UK manufacturing through the Brexit transition

With increased manufacturing comes an increased need to move larger quantities of freight around the UK and across the globe. Despite border controls, exporting goods overseas is still relatively straightforward, particularly to Europe and the US. However, depending on the trade deal agreed on 15 October, exporting to the eurozone could come with a new set of paperwork and rules which will need to be abided by for smooth transportation.

To support UK manufacturers during this time of growth and through the uncertainty of the next few months, freight companies must keep a close eye on the changing regulations, ensuring they are in the best position to serve customers shipping their goods out of the UK, as well as across the country.

At DG, we are prepared for a worst-case Brexit scenario – a situation in which we treat all shipments as if they are entering China, where there are the greatest number of restrictions. Get in touch if you are a UK manufacturer looking to expand your geographical marketplace with cross border logistics.