Before leaving for my maternity break, the last deal I worked on was Semmco, an aviation specialist, family-run manufacturing business in the UK and US. Seeing my team complete the deal over my break was a great feeling, it nice to see Stuart and Sarah hand over their business to a great international buyer, HAKI.
It is no surprise to see this elevated level of interest from international buyers in the UK manufacturing sector. Since moving from the US to the UK in 2020, we have seen a fair amount of turmoil, be that political, COVID, or the impact of Brexit. Despite these, the UK manufacturing sector has proved to be more than just resilient, it has led the world in productivity gains over the last five years.
According to an article published by The Manufacturer, the value added by manufacturing employees in the UK increased by almost £11,200 per worker between 2018 and 2023.
From the analysis, World Bank data shows that UK manufacturers delivered net output worth £224.2bn in 2023 after removing the cost of energy, materials, and other inputs. This equated to £87,300 of added value for each of the UK’s 2.6 million manufacturing workers in 2023, 15% more than the £76,080 value-add per worker achieved five years earlier.
These gains were higher than any other major manufacturing economy over the same period, including Germany (£84,890), South Korea (£74,480), and Japan (£60,860). Whilst China produces more than a quarter of the world’s £12.97tn total net output, worker productivity level was £17,610.
So, this brings about the question: what are UK manufacturers doing so differently?
This depends on what the definition of productivity is. For manufacturers, higher productivity means producing more with the same resources, reducing costs, increasing competitiveness, and driving profitability.
In an industry where margins are tight and global competition is fierce, improving productivity through better processes, smarter technology, and data-driven decision-making is essential for long-term growth.
What we have witnessed with Semmco, and previous manufacturing clients, is the impressive level of innovation, use of smarter technology, and striving towards sustainability is the driving UK manufacturing to become very attractive to overseas customers and investors.
With the rapid technological transformation in this sector and interest from international buyers, this could be an appropriate time to explore your options for raising funding or securing a valuable exit, especially if you are manufacturing in hand with technology and innovation. If you want to get in touch about manufacturing or technology related deals and values, please feel free to let us know and we gladly take you through the current state of play. In the meantime, you may find our latest sector valuation report of interest.
