SECTOR PROSPECT STUDY
- MANUFACTURING
Steven Cochrane
Head of Strategy – PLACE
Pennine Lancashire Leaders Joint Committee – 13th July 2011
Context• 1st in a series of sector prospect studies;• To give the ESB the evidence base and intelligence to fulfil its role
effectively:
“To bring together the supply and demand sides of the Pennine Lancashire labour market; ensuring the employability and skills levels of local people match employer needs”.
“To lead on the planning, funding and commissioning of employment and skills provision in Pennine Lancashire”.
Advanced Manufacturing: “Industries andbusinesses which use a high level of design or scientificskills to produce innovative and technologically complexproducts and processes”.
Pennine Lancashire Sectors
PUBLIC SECTOR
28%
MANUFACTURING
24%
AEROSPACE
24%
EMPLOYEES
RETAIL
11%
ACCOMODATION & FOOD
SERVICES
6%
CONSTRUCTION
4%
WHOLESALE
4%PROFESSIONAL,
SCIENTIFIC & TECHNICAL
4%
BUSINESS ADMIN &
SUPPORT
4% ARTS, ENTERTAINMENT & RECREATION
5%
EDUC 9% HEALTH
14%
ADMIN & DEFENCE 4%
PL district breakdown
• Pennine Lancashire retains a large degree of manufacturing industry (24%) in comparison to the regional (11%) and national average (9%).
• Pennine Lancs breakdown:
– Ribble valley 40% - 11,700– Pendle 31% - 9,000 – Rossendale 23% - 4,500– Hyndburn 19% - 5,000 – Burnley 19% - 5,800 – BwD 18% - 11,000
69.5% 21% 7.5% 2.0%
1-10 employees
11-49 employees
50-199 employees
200 or more employees
SME Manufacturing are adaptive, nimble and dynamic
Over 1,780 manufacturing plants across PL
Manufacturing – Economic Impact
£0
£5,000
£10,000
£15,000
£20,000
£25,000
£30,000
£35,000
£40,000
PennineLancashire
Cheshire UK Liverpool Manchester Leeds
Average manufacturing job in Pennine Lancashire = £36,500
Aerospace – GVA per employee
BAE = £86,000
Rolls Royce £96,000
1 Managers and Senior Officials
10%
2 Professional Occupations
5%
3 Associate Prof & Tech Occupations
4%
4 Administrative and Secretarial Occupations
8%
5 Skilled Trades Occupations
28%6 Personal Service
Occupations0%
7 Sales and Customer Service Occupations
4%
8 Process, Plant and Machine Operatives
25%
9 Elementary occupations
16%
Manufacturing Occupations within Pennine Lancashire
VARIETY OF ROLES NEEDED
Sub Sector - Aerospace• Strong Aerospace cluster.• The sub sector represents 24% of the total
manufacturing workforce. • PL accounts for 13% of England's and 56% of
the North West’s total employment. • Primes – BAE Systems and Rolls Royce;• NW Aerospace Alliance.• 10 year+ aerospace contracts including BAE
JointFighter aircraft till 2035.
Pennine
Aerospace Jobs Trend
Other Sub-Sectors• Chemicals 2,600 employees/60 sites
– Eka (Akzo Nobel) Chemicals, William Blythe, Baxenden Chemicals, Victrex & Blackburn Chemicals
• Fabricated Metals 4,500 employees/390 sites– Presspart, Saco, PDS Engineering
• Machinery and Equipment 2,100 employees/177 sites– Cobble, Fort Vale
• Computer Electronic & Optical Products 1,500 employees– Invotec, Crown Eyeglass, Promethean, Protec Fire detection,
Raven, AMS Neve• Motor Vehicles and Trailers 1,400 employees/40 sites
– Optare, Merc, Setco, TRW• Rubber 4,200 employees/118 sites
– Lucite, RPC, RPC, Precision Polymar and Weltonhurst, Flexipol, Ultraframe, Veka and Wardles.
Skills, Education & Employment• Advanced manufacturing requires a
sophisticated skills base; • Growth is heavily dependent on STEM;• Home office changes to migration may affect
ability of sector to access skilled labour;• Employment opportunities: JC+ advertised
vacancies 7% of all jobs within manufacturing in PL compared to 2% regionally and 3% nationally.
KS2 – Age 7-11
0
10
20
30
40
50
60
70
80
90
100
Blackburnwith Darwen
Burnley Hyndburn Pendle Ribble Valley Rossendale PennineLancashire
Rest ofLancashire
% g
ain
ing
le
ve
l 4
or
ab
ov
e
English: KS2 Maths: KS2 Science: KS2
KS3 – Age 11-14
0
10
20
30
40
50
60
70
80
90
100
Blackburnwith Darwen
Burnley Hyndburn Pendle Ribble Valley Rossendale PennineLancashire
Rest ofLancashire
% g
ain
ing
le
ve
l 5
or
ab
ov
e
English: KS3 Maths: KS3 Science: KS3
30
40
50
60
70
80
90
BwD
Burnle
y
Hyndburn
Pendle
Ribble
Val
ley
Rossen
dale
Pennin
e Lan
cash
ire
Rest o
f Lan
cash
ire
North W
est
England
% o
f p
up
ils
Percentage of pupils achieving 5+ GCSEs or equivalent at grades A*-C
Percentage achieving 5+ GCSEs or equivalent at grades A*-C including English and maths
Percentage achieving 2+ GCSEs or equivalent at grades A*-C in science subjects
GCSE Attainment
Apprenticeships
• In 2009/10 – 4% Level 2 Apprentices; 9% Level 3 Apprentices in SEMTA. Does not meet the future need of the sector;
• Potential increase in future take-up – University tuition fee increases;
• Govt to expand adult apprenticeships places by up to 75,000 by 2014/15.
Prospects?
• Impact from CSR - welfare cuts & VAT reduce consumer spending affecting lower end manufacturing.
• Cuts in Strategic Defence Review
• Manufacturing ‘back in fashion’ with Govt
• Positives - Budget 2011 to assist UK’s Manufacturing sector - funding help for companies through the UK-wide Green Investment Bank and the protection of the Science budget.
Prospects?
• University Technical College• Blackburn College STEM• Burnley UCLAN• Technology and Innovation Centres [TIC]• Enterprise zones• RGF• Apprenticeships • Business Growth Fund - SME
Prospects? UK Exports Market Top 20 plus BRIC
Growing appetite
for Western
products
Big opportunities for
PL manufacturers
Source
ONS
£million
Strengths
Established manufacturing base;
Aerospace cluster;
NW Aerospace Alliance;
10year+ aerospace contracts including BAE Jointfighter aircraft till 2035
Weaknesses
Economic outlook and dependency on Government spending
Low Skills base / educational attainment
Future skills and training
Poor housing offer
Weak Transport links
Opportunities
Globalisation into new market
Currency fluctuations
Adaptable manufacturing SME Low carbon economy
Apprenticeships
International controlled migration
Forming alliances and partnerships across sub regions
University Technical College
Blackburn College STEM Centre / Bly UCLAN
Threats
Globalisation and innovation from other countries;
Remanufacturing from the emerging economies
Cuts to Research and Innovation
Overseas company relocations to get closer to new markets
Business relocations due to controlled migration
Next Steps…• Continued dialogue with manufacturers and industry experts;• ESB
– Apprenticeships (clear targets)– Improved IAG– Simplify current ‘cocktail of funding’– Explore potential for more ATA/GTAs
• Regenerate/LAs– Modern premises/suitable sites– RGF bid submitted “PL200”– Innovation/Business support/Access to finance– Education
• Raise PL’s manufacturing profile nationally
• Next study - construction sector