Contribution of the specialist manufacturing sector to regional economies
A Westminster Hall debate on the contribution of the specialist manufacturing sector to regional economies is scheduled for Wednesday 19 November 2025, from 9:30am to 11:00am. The debate will be led by Josh Fenton-Glynn MP.
Manufacturing remains an important part of the UK economy, with well-established clusters across many regions.
Manufacturing-intensive sectors feature prominently in the Government’s modern industrial strategy, published in June 2025.
The strategy outlines a ten-year plan that the Government says is intended to create conditions that support business investment across the UK, raise living standards, strengthen economic security and resilience and support the transition to net zero greenhouse gas emissions.
The Government has identified eight “growth-driving” sectors (the IS-8) for targeted support under the strategy. Each sector has its own individual sector plan, which provide detail about each industry and specific policy interventions and targets for each sector.
Two of these, advanced manufacturing and defence, are directly relevant to specialist manufacturing.
Economic output and employment in UK regions and countries Advanced ManufacturingThe tables below show gross value added (GVA) and employment in advanced manufacturing.
Source: ONS, Regional gross value added (balanced) by industry: all ITL regions, Table 1c; NISRA, NI Business Register and Employment Survey, Table 2.3; ONS, Business Register and Employment Survey, via Nomis
Estimates of the contribution of advanced manufacturing to regions and nations of the UK draw on the Industrial Strategy Sector Definitions List, which links each sector, where possible, to Standard Industrial Classification (SIC) codes.
The economic output estimate above also includes manufacture of petroleum products (SIC19), which is not part of the IS definition, as it is grouped with SIC 20 (manufacture of chemicals) in the data source. Therefore, the estimate is slightly broader than the IS definition.
DefenceThe Library’s briefing on the contribution of the defence industry to UK regions and nations explains that the sector is estimated to contribute around £10 billion to £15 billion a year to the UK economy, with most activity concentrated in South East and South West England.
The tables below draw on estimates from the Aerospace, Defence and Space Group (ADS), the trade body for the defence sector.
Source: House of Commons Library correspondence with ADS; ADS, ADS Defence Sector UK Outlook 2025, page 9.
Make UK is the national body representing manufacturers.
In its 2025 regional manufacturing outlook, Make UK reports that that regional performance depends on how well its main manufacturing subsectors perform.
The South West recorded the strongest output and orders growth in 2025, which the report links to growth in its aerospace and defence industries. (pp17–18). In the North East, output and orders have fallen from very high levels to roughly the UK average, mainly because the pharmaceuticals subsector has slowed (p11).
Make UK also notes that short-term performance does not always match investment plans. The South West reported strong activity but negative investment intentions (p17), while the North West showed moderate output growth but the strongest investment intentions in the UK (p13).
Common challenges across regions include skills shortages and higher business costs but Make UK welcomes the introduction of the Government’s new long-term Industrial Strategy (p4).
Further reading- House of Commons Library, Industrial Strategy in the UK, October 2025
- House of Commons Library, How much does the defence industry contribute to UK regions?, September 2025
- Department for Business and Trade, Industrial Strategy, June 2025
- Department for Business and Trade, Industrial Strategy Sector Plans, June 2025
- Make UK, Regional Manufacturing Outlook 2025, July 2025
- Make UK, Autumn Budget Business Tax Rises Risk De-industrialisation, November 2025