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