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UK “in the relegation zone” on manufacturing jobs compared to European peers – new TUC analysis

Issue date

  • New TUC analysis reveals fall in manufacturing jobs and investment makes UK worst performer when compared with the likes of Spain, France, Germany and Italy. 

  • UK is missing out on 276,000 manufacturing jobs after failing to keep pace with the EU average.

  • Investment in manufacturing is only around 1% of UK GDP, less than a third of the EU average of 3.5%.

  • TUC calls on the government to introduce long-term funding and robust legislation to rebuild Britain's manufacturing strength. 

The TUC is today calling for a national mission on reindustrialisation to increase economic resilience and protect jobs.  

The call comes as new TUC analysis shows that the UK is languishing at the bottom of the European league table when it comes to jobs in the manufacturing sector and investment in industry. The union body says this makes Britain poorer and weaker, by lowering wages, increasing regional inequality and weakening resilience.

If the government wants to make good on its promise to reindustrialise Britain, it needs to “pull all levers” at its disposal to restore Britain's industrial strength, the TUC says. That includes introducing a British version of the EU’s Industrial Accelerator Act and setting up a Reindustrialise Britain Unit in No 10 North.

 

In the relegation zone  

Manufacturing was once the engine room of the British economy - but in the last forty years, UK industry has been deprioritised and starved of investment. In fact, Britain's deindustrialisation significantly outpaced that of comparable European peers. 

 

Fresh TUC analysis shows that:

 

The UK has 276,000 fewer manufacturing jobs than it would have if it had kept pace with the EU27 average since 2010. And when compared with the trajectory of European peers, the UK is missing out on:   

  • 552,000 jobs compared to Spain 

  • 284,000 jobs compared to Italy

  • 215,000 jobs compared to Germany 

  • 75,000 jobs compared to France

     

By 2025, manufacturing jobs in the UK were down 7% compared to 2010 – resulting in more than 200,000 job losses across the country. By contrast, in the EU industrial jobs have grown by 3% on average - and even in countries where these jobs have fallen, declines have been less significant than in the UK. Among comparable European peers manufacturing jobs have: 

  • Grown by 12% in Spain (+293,000 jobs)

  • Grown by 3% in Italy (+119,000 jobs)

  • Grown by 0.4% in Germany (+31,000 jobs)

  • Decreased by 4% in France (-150,000 jobs)

Even if UK manufacturing employment had fallen at the same rate as France since 2010, we would still have 75,000 more jobs than we do today.

TUC analysis shows that the fall in UK manufacturing jobs is matched by chronically low investment – with total investment in manufacturing now stagnating at around 1% of UK GDP, well below the EU average of around 3.5%. 

Europe's stronger manufacturing base reflects years of proactive industrial policy. Governments have supported industry beyond a narrow set of growth sectors - to boost wages, tackle regional inequalities and build economic resilience.

This approach combines EU-wide initiatives, such as the Clean Industrial Deal and Industrial Accelerator Act, with national strategies. For example, Germany and Spain have invested in industry through long-term public finance.

National mission to reindustrialise Britain 

An industrial revival can sit at the heart of tackling many of the UK's biggest challenges, the TUC says, such as increasing economic resilience, protecting jobs and taming the cost of living crisis. 

 

The 2025 Industrial Strategy represents a significant step forward, the TUC says, but it's not enough on its own – especially as most existing manufacturing capacity falls outside its priority sectors. That's why the TUC is calling on the government to “go further and faster” and: 

  • Introduce a new National Mission to reindustrialise Britain, overseen by a Reindustrialise Britain Unit and a Mission Board based out of No 10 North.

  • Introduce a UK version of the EU’s Industrial Accelerator Act using procurement, subsidies and investment rules to support firms and supply chains and strengthen resilience in strategic sectors.

  • Establish a Reindustrialise Britain Fund to drive long-term investment in industry and infrastructure through grants, equity investment and concessionary loans. The Fund should take a 15-year-plus approach to overcome short-termism.

  • Take bold action on spiralling energy costs holding manufacturers back at every turn, aiming for parity with European peers. 

  • Ensure new jobs in manufacturing are good, stable and unionised.

 

Unlocking investment

The government should also rewire its existing fiscal rules to invest in reindustrialisation, the TUC says.

Since Labour took power, investment growth has been significantly stronger than before. But there are still serious long-term problems to overcome.  

The government now needs to “release the handbrake,” the TUC says, and take full advantage of the capabilities its fiscal framework provides. 

That means making the most of rules that allow the government to offset the cost of borrowing by considering the value of the financial assets it invests in. This calculation is called “public sector net financial liability”, or PSNFL, the measure now used for the government’s fiscal rule for debt. 

The TUC believes this approach could help unlock a generational wave of investment to help reindustrialise Britain, boost demand and grow the economy.

The TUC is also calling for a fiscal commission to review how the Office for Budget Responsibility (OBR) models growth. The union body believes that the OBR’s models bake in assumptions that encourage widely discredited austerity policies - such as the highly contentious idea that public spending will “crowd out” private investment.

TUC General Secretary Paul Nowak said: 

"Manufacturing communities powered the UK economy for generations. 

"But the Conservatives starved our industrial sector of vital investment, which left Britain poorer and weaker. 

"Now we're at the bottom of the league table compared to our European peers when it comes to manufacturing investment and jobs. But it doesn't have to be that way.

"The prime minister has said the right things about reindustrialising Britain so far. But to deliver he needs to make reindustrialisation a national mission and match our EU partners by introducing a UK Industrial Accelerator Act.

"And the prime minister needs to make our existing fiscal rules work harder to release the handbrake on investment. 

"That's how you protect our existing manufacturing base and deliver a strong, thriving industrial sector to power our economy." 

GMB Head of Policy and Research Ross Holden said:

“Every time an industry collapses it leaves hundreds of workers and thousands of families left in despair. 

“We need to back British manufacturing with new procurement rules that promote good unionised jobs at home, not offshore work abroad.”

 

ENDS

Notes to editors:

Manufacturing and total employment data were used to construct jobs trajectories for the UK and comparator countries, and were obtained from the following datasets: 

Industrial Jobs Gap figures were estimated by applying the annual rate of change in total manufacturing jobs for each country to UK manufacturing jobs data between 2010 and 2025.

 

Manufacturing investment as a proportion of GDP was constructed using the following datasets: 

 

Foreign controlled share of manufacturing turnover was estimated using the below data, with SIC codes grouped as per the ONS industry allocation: 

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