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Humber Engineering & Assembly Engineering & Assembly Chapter April 2019 Engineering & Assembly Chapter Contents 1. Introduction ............................................................................................................................................ 1 2. A Framework for Identifying Growth Industries in the Sector ............................................................. 4 3. Engineering & Assembly Sector Specialisms ...................................................................................... 7 4. Business Stock ....................................................................................................................................... 8 5. Labour Market ....................................................................................................................................... 11 6. Sub-Sectors .......................................................................................................................................... 12 7. Common themes and emerging priorities… ....................................................................................... 26 Appendices ............................................................................................................................................... 27 2 Engineering & Assembly Chapter 1. Introduction Definition Engineering refers to the branch of science and technology primarily concerned with the design, manufacture and use of components, machines and structures. Assembly is the process of combining manufactured parts using advanced processes to form a completed product of higher value. Productivity Transition Aims Sector Overview Engineering & Assembly is responsible for a workforce of almost 1 million people in England employed across 62,000 VAT-registered businesses. The sector was worth an estimated £69.1 billion in 2017, reporting consistent annual growth since 2013. Figure 1 illustrates the steady rise in the ‘real’ adjusted value (at 2016 prices) of the Engineering & Assembly sector for England since 2009. Locally, the sector accounts for over 25,000 jobs and represents 6.1% of total employment across the Humber sub-region. Only Lancashire LEP (6.7%) and the North East LEP (6.4%) have a greater concentration of employment within this sector across the Northern Powerhouse. Figure 1: Engineering & Assembly England chained volume measures in 2016 £, 2007- 2017 Source: Office for National Statistics (ONS), 2018 1 Engineering & Assembly Chapter The local definition of ‘Engineering & Assembly’ for the purposes of the Humber Local Industry Strategy (LIS) is provided in Appendix A and includes the less energy-intensive production processes within the manufacturing sector. The manufacture of wood; furniture; metal products; electrical equipment; machinery; motor vehicles and transport equipment are broadly included within this classification, which collectively are generally better represented in the north of England compared to the national average. Comparative advantage The Humber sub-region demonstrates significant overall strength in the Engineering & Assembly sector based on employment base. A definition used for Location Quotients (LQ) in this report is included in Appendix B. Figure 2: Comparative advantage in Engineering & Assembly across the Humber (2017) Humber 1.66 Y&H England 1.27 1.00 Source: Derived from Humber LIS sector definition and Business Register and Employment Survey (BRES), 2018 Employment in the Engineering & Assembly sector is most strongly represented in the East Riding of Yorkshire and Kingston upon Hull. Each local authority has individual specialisms in specific industries, but collectively over one-fifth of total employment in the sector (21.6%) across the region is located within the Humber sub-region. Figure 3: Engineering & Assembly Sector Overview Geography Employment % of total Location employment Quotient East Riding of Yorkshire 9,500 7.5% 2.00 Kingston upon Hull 9,000 6.7% 1.80 North East Lincolnshire 1,875 2.7% 0.72 North Lincolnshire 4,750 6.3% 1.70 Humber 25,125 6.2% 1.66 Yorkshire & The Humber 116,500 4.7% 1.27 England 992,000 3.7% - Source: BRES, 2017. Humber figures calculated from combined total of authorities and BRES baseline employment 2 Engineering & Assembly Chapter Employment base The map below illustrates the employment base concentrations within the Engineering & Assembly across the Humber. Key locations for major employers include Hedon Road (Hull); Carnaby Industrial Estate; Cottingham; Brough; and Howdendyke on the north bank, and Barton upon Humber and Normanby Enterprise Park, near Scunthorpe on the south bank of the Humber. Figure 4: Engineering & Assembly employment concentrations across the Humber 3 Engineering & Assembly Chapter 2. A Framework for Identifying Growth Industries in the Sector This section introduces a simple framework to analyse the relationship between employment change and sector specialisms (quantified as a Location Quotient, LQ) within Engineering & Assembly, which accounts for 25,000 jobs across the Humber. Each industry within the sector is categorised as one of four types in Figure 5 below. Figure 5: Shift in employment and specialisms across the Humber (2010-2017) Source: Derived from Humber LIS sector definition and Business Register and Employment Survey (BRES), 2017 4 Engineering & Assembly Chapter The table below sets out a definition to determine growth and mature industries within the sector. Quadrant (category) Definition Shrinking LQ and decreasing Fall in employment by at least 1.0% of employment sector Shrinking LQ and increasing employment Over 0.75 LQ; Growing LQ and decreasing employment Total employment at least 1.0% of sector Growing LQ and growing employment Rise in employment by at least 1.0% of sector This definition was applied to employment statistics published by the Office for National Statistics (ONS) in the Business Register and Employment Survey (BRES) to identify the industries in Figure 6 below. Collectively these ‘mature’ and ‘growth’ industries account for two-thirds of employment within the Engineering & Assembly sector. Figure 6: Growth and mature industries across the Humber (2010-2017) Growth engineering industries 31 Furniture 16 Wood & wood products 25.1 Structural metals products 25.6 Treatment & coating of metals, machinery 28.11 Engines & turbines, except aircraft, vehicles & cycles 25.99 Other fabricated metal products 28.9 Other special-purpose machinery Mature engineering industries 29 Motor vehicles, trailers and semi-trailers 30 Other transport equipment 28.2 Other general-purpose machinery 25.21 Central heating radiators and boilers Source: Derived from Humber LIS sector definition and Business Register and Employment Survey (BRES), 2017 Growth engineering sectors account for an additional 2,630 jobs across the Humber in 2017 compared to 2010, which represents growth of 37.4% over the period. The manufacture of wood products (16) and engines & turbines (28.11) in particular have bucked the national trend, supporting a further 2,600 jobs. Conversely, the manufacture of motor vehicles reported a minor decrease in employment compared to strong growth nationally (up to 2017), though it should be noted that this definition accounts for the caravan industry locally and tends to exhibit vastly different characteristics from the motor industry overall. 5 Engineering & Assembly Chapter Figure 7: Employment change in growth engineering industries (2010-2017) Source: Derived from Humber LIS sector definition and Business Register and Employment Survey (BRES), 2017 The graph below illustrates the steady increase in the (balanced) regional gross value added current price estimates for mature and growth industries within Engineering & Assembly. Figure 8: Regional GVA (Balanced) for mature and growth industries, 2010-2017 Source: Office for National Statistics (ONS), 2018 6 Engineering & Assembly Chapter 3. Engineering & Assembly Sector Specialisms Manufacture of wood & wood products - includes the manufacture of timber, plywood, veneers, wooden containers, wooden flooring, trusses, and prefabricated wooden buildings. Humber 3.96 Y&H ENG 1.40 1.00 Manufacture of fabricated metal products - includes the manufacture of ‘pure’ metal products (such as parts, containers and structures), usually with a static, immovable function. Humber Y&H 1.91 1.76 ENG 1.00 Manufacture of machinery & equipment - includes the manufacture of machinery that act independently on materials mechanically, thermally, perform operations or apply force. Y&H Humber 1.76 1.33 ENG 1.00 Manufacture of motor vehicles & trailers - includes the manufacture of motor vehicles for transporting passengers or freight, in addition to parts and accessories. Humber 1.42 ENG Y&H 1.00 0.74 Manufacture of furniture - includes the design and manufacture of furniture and related products of any material except stone, concrete and ceramic. Humber 4.37 Y&H 2.60 ENG 1.00 Source: UK Standard Industrial Classification of Economic Activities 2007, Office for National Statistics (ONS), 2009 7 Engineering & Assembly Chapter 4. Business Stock Business stock The map below shows the density of Engineering & Assembly businesses by Middle Super Output Area (MSOA), a statistical geography developed by the Office for National Statistics (ONS). Figure 9: Engineering & Assembly business stock concentration across the Humber This map shows the significant concentration of businesses on the north bank of the Humber, principally along the industrial estates that flank the A63 in Kingston
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