Having seen a brutal 10% decline in output in 2020, the sector is now set to recover a significant amount of that loss in 2021 and will outpace the growth of the economy overall. This growth is based on a surge in both domestic and overseas orders which is translating into strong hiring intentions.
However, the figures are reflecting a recovery from a very low base with balances last year reaching record lows worse than those seen during the financial crisis. Between 2019 and 2020 the manufacturing sector lost approximately £18bn in value which will take more than a short-term boost of pent-up demand to return the sector to its pre-pandemic size. Assuming high effectiveness of the COVID-19 vaccine, Make UK forecasts suggest that manufacturing output levels will return to pre-pandemic levels by the end of 2022; which is earlier than previously forecasted.