How manufacturing remains central to Yorkshire's economic success

The report from manufacturers’ organisation Make UK and accountancy firm BDO also shows the extremely high reliance of the region on the EU market for exports.

As a result, Make UK has stressed the vital need to secure a trade deal with the EU before the end of the year that avoids trade barriers. Failure to secure such a deal risks significant damage to prospects for industry in Yorkshire, the organisation said.

Manufacturers in the region have endured a tumultuous year, according to the report, which analyses the overall status of industry in the region over the last 12 months.

Output and orders initially performed strongly before a downturn in EU markets to which the region is heavily exposed was further compounded by the impact of Covid-19.

Steve Talbot, head of manufacturing at BDO in Yorkshire and Humber, said: “The region’s manufacturers were already facing huge uncertainty over the UK’s future trading relationships, even before the seismic shock of Covid-19.

“Many have stepped up to support the country at a time of crisis. But they now urgently require the Government to deliver a trade deal with the EU that protects their interests and allows them to plan – in addition to a longer term recovery package which encourages investment in skills, digital transformation and a greener future.

"As the furlough scheme begins to wind down, many of the region’s manufacturers will face difficult decisions on jobs and investment, so it’s vital that their pleas for support are heard loud and clear by policymakers both locally and nationally."

Food and drink remains the region’s biggest manufacturing sector, accounting for over a fifth of output, worth £3.4bn, and a rare source of growth amid the pandemic. This is followed by metal products, which faces substantial challenges through the downturn as a result of a drop in demand for steel.

Prior to the impact of the pandemic Yorkshire saw strong recruitment and investment intentions compared to other UK regions.

Yorkshire continues to be a strong export performer, accounting for over five per cent of total UK manufacturing exports.

The EU remains the region’s main export destination, 58 per cent, followed by Asia and North America.

June Smith, region director for Make UK in the North, said: “The report shows that industry continues to have a central role to play in the success of the Yorkshire and Humber economy.

“There are well documented challenges going forward, not least the major impact of Covid-19 and the global economic downturn, the results of which are likely to be felt for some time.

“Furthermore, the outcome of Brexit has the potential to have an impact on the future performance of manufacturers in Yorkshire and Humber given the exposure to the EU as a major export market.

“If we are to avoid a double whammy hit on the sector it is essential that the UK agrees a trade deal before the end of the year that prevents barriers to trade.”