Booming North East Leapfrogs London Engineering Start Ups

The North East’s expanding engineering sector has exceeded London for growth by almost six per cent over the past year, according to a report by Nixon Williams.

Buoyed by the strength of the region’s automotive and rail sectors, research by the market-leading accountancy service indicates between 2014 and 2015 the number of engineering enterprises in the North East grew by 17.6 per cent, from 595 to 700.

This contrasts to a five per cent gain in engineering businesses across the UK as a whole, from 20,490 to 21,510 operations. The number of engineering enterprises in London grew by 11.8 per cent over the past year, from 1,985 to 2,220.

The North West is the third fastest growing region for engineering enterprises, increasing by 9 percent between 2014 and 2015, from 1,895 to 2,065. This is owing to the ongoing decommissioning of Sellafield nuclear reprocessing complex in Cumbria (North West), which is one of the major engineering mega-projects outside London.

The analysis by Nixon Williams demonstrates that despite the rebound in the engineering sector in most regions in the previous few years, the number of engineering firms in the UK is still 11 per cent below its 2009 peak. There were 24,220 engineering enterprises in the UK in 2009.

Victoria Kelly, practise manager at Nixon Williams, said: “The engineering sector is rebounding strongly, but that recovery is very unevenly distributed. A decline in the number of engineering firms is still occurring in at least three regions: Wales, the West Midlands, and the South West. At the other end of the range you have the North East and London well into double digit growth.

‘At the current pace of expansion, the total stock of engineering enterprises will surpass the 2009 peak in another three years.’

Although Crossrail has boosted engineering start-ups in the capital, the North East is now taking the lead, according to the report. “Multinationals like Nissan, Hitachi, Komatsu, and Caterpillar have established themselves as engineering powerhouses in the North East.”

“The rail, aerospace, and defence industries, in addition to automotive, are thriving in the North East. All these areas support a supply chain, which is where many engineering start-ups tend to develop as providers to the huge multinationals,” continued Kelly.

According to Nixon Williams, the North East is beginning to experience an engineering skills shortage that has been visible in London and the South East for some time. A group of senior engineers are reaching retirement age, and apprenticeships have been reluctant to recover from their recessionary fall.

Victoria Kelly says: “It’s low cost base and talent pool make the North East an attractive location for engineering businesses, but skills gaps are widening. While the number of apprentice starts is increasing, the drop-out rate is still relatively high. The North East has to guarantee that its skills base is appropriate to the needs of engineering industries so that it continues to attract inbound investment”.

Last Updated on December 29, 2021

Indra-Gupta

Author: Indra Gupta

Indra is an in-house writer with a love of Newcastle United and all things sustainable.

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