The IOE&IT Daily Update rounds up the latest developments in UK manufacturing, including a substantial drop in a key economic index, a potential cash injection for the steel sector and surging car production numbers.
August figures causes concern
A leading financial index assessing the health of the UK’s manufacturing industry has recorded a substantial drop between July and August.
In August, the S&P’s Purchasing Managers’ Index (PMI) for UK manufacturing fell from 45.3 to 43.0. Any number under 50 indicates an economic contraction in the sector.
Alongside house prices falling to a fourteen-year low, the news has stoked concerns over the UK economy.
Chancellor defends steel deal
Chancellor Jeremy Hunt told Sky News that the UK’s steel industry is highly competitive as government talks progress to provide Tata Steel with a £500m cash injection.
The funds, along with £700m from the Indian parent company, would subsidise modifications to the Port Talbot plant and aim to make produce more environmentally sustainable steel.
However, efforts to decarbonise the production process are likely to result in less labour-intensive equipment, raising fears that thousands of jobs will be lost over the next few years.
Automotive industry remains bright spark
Data from the Society of Motor Manufacturers and Traders (SMMT) showed a continued growth in car registrations, predominately from businesses, with fleet and industry registrations up substantially in comparison with private registration increases.
The SMMT anticipates that new care registrations will reach 1.85m by the end of the year.
UK car production also surged in July, rising by 31.6%.
SMMT CEO Mike Hawes said that the growth showed that “British car production is recovering and, with electrified models increasingly driving volumes, the future is more positive.”
David Borland, EY’s UK and Ireland Automotive Leader, said the figures highlighted “the industry's significant resilience in amid persistent headwinds”.
Apple investigates 3D printing
Bloomberg revealed Apple is exploring the viability of 3D printing to produce smartwatch parts.
The technology could be applied to the manufacture of the steel chassis encasing the watch. Permanent rollout could have significant labour and supply chain implications, making certain jobs and manual processes obsolete, sources told Bloomberg.
If successful, Apple is expected to expand the manufacturing process to other products over the next few years.
British defence firm boosts Ukraine ties
Last week brought big news for British manufacturing and UK-Ukraine relations.
In addition to promises of lucrative construction contracts to help with post-war rebuilding, the BBC reported that defence firm BAE Systems has announced its increasing production to support the Ukrainian war effort.
BAE set up a local entity and has signed deals to ramp up its supply of weapons and equipment to Ukraine. There is also the possibility of opening a factory in Kyiv to produce light artillery.