Manufacturing jobs and the EU

Published: 9th Mar 2016

In brief

Claim

Two thirds of manufacturing jobs, and 50,000 manufacturing apprenticeships, are reliant on Britain’s membership of the EU.

Conclusion

This is wrong. Roughly 15% of manufacturing jobs can be said to be directly linked to demand from other EU countries. That doesn’t mean these jobs are dependent on the UK being an EU member. Both claims are based on older inaccurate figures, and use flawed comparisons.

“For UK manufacturing jobs, our EU membership is absolutely critical. Two thirds of British jobs in manufacturing are dependent on demand from Europe.

“That’s two thirds of our manufacturing base reliant on that single market access and Britain’s membership of the EU.”

“…That’s 50,000 apprenticeships which depend on our EU membership and leaving the EU could put those at risk.”

Alan Johnson, 23 February 2016

These claims are wrong. The figures were compiled by combining estimates for the number of jobs associated with trade with other EU countries in 2011 with total industry job and apprenticeship statistics. But the calculations are flawed and the estimates on which they’re based have since been substantially revised.

Newer figures suggest roughly 15% of manufacturing jobs were directly associated with demand from other EU countries in 2014. It’s not possible to compare this to the number of apprenticeships associated with this demand.

The report that the original figures were based on spells out that this doesn’t mean this many jobs would be lost if the UK left the EU. It describes its calculations as “an analysis of demand arising from UK exports to the EU”, rather than from the UK’s membership of the EU.

It also doesn’t necessarily mean that these jobs would be lost if demand from other EU countries declined, whether or not the UK stays in, as UK manufacturers might increase their trade with other countries instead.

The original estimates

About 1.7 million manufacturing jobs in 2011 were associated with trade with other EU countries, according to old analysis by economic consultancy the Centre for Economics and Business Research. It has since revised its estimates and found this isn’t correct.

The claim that two-thirds of manufacturing jobs are linked to the EU comes from comparing that 1.7 million figure to the 2.55 million manufacturing jobs in that year.

But even if the 1.7 million figure was correct, it can’t be compared to the 2.55 million figure. That’s because it includes jobs both directly linked to trade with other EU countries and indirectly linked, through that trade supporting jobs in other industries that work with manufacturers and manufacturing employees spending their earnings arising from that trade.

CEBR sent us unpublished revised estimates for the manufacturing industry, which focus just on employment directly associated with demand from other EU countries.

These suggest there were about 436,000 jobs directly associated with this trade in 2011. That’s about 17% of the 2.55 million manufacturing jobs in that year.

For 2014, it said the figure is about 382,000 jobs, which is about 15% of the 2.6 million jobs in 2014. So the figure fluctuates depending on what year you look at.

We don’t have the figures for the other years.

Overall it has said that about 3.1 million jobs were associated with trade from other EU countries in 2014, including both direct and indirect employment.

It’s not possible to say how many jobs would be lost in the event of the UK leaving the EU, as we discuss in our more in depth briefing on jobs and the EU.

We don’t know how many apprenticeships are associated with EU trade

There were 74,000 apprenticeship starts in engineering and manufacturing in 2014/15.

If two thirds of these were linked to EU trade, as with the old figures for manufacturing jobs for 2011, then the equivalent figure would be about 50,000 apprenticeships. As we now know the two-thirds figure is incorrect, this 50,000 figure is also wrong.

It’s difficult to get a revised estimate for the number of apprenticeships affected, as the comparison is problematic. The apprenticeship data combines manufacturing apprenticeships with engineering apprenticeships, whereas the CEBR data looks only at manufacturing jobs. Engineering apprentices can work in areas like construction, for example.  


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