This page provides UK exporters in the Engineering (Electrical, Mechanical & Process) Sector with information on assistance available from UK Trade & Investment as well as some other sector information and contacts.
The sector covers the complete spectrum of electrical, electronic and mechanical industries from capital power equipment to wiring accessories. It includes such diverse equipment as batteries, fluid power, instrumentation, machine and engineers’ tolls, handling and lifting equipment, pumps, valves and springs and the manufacture of production machinery for processes in the catering, ceramics, constriction food processing, knitting, packaging, printing, textiles and for the woodworking, plastics and rubber industries. Sector representation is equally diverse. There are more than 40 Trade Associations representing different sub-sector groups, some with just a few members. Many will have their own trade development strategies. A strategy for the sector is necessarily very general.
The sector as defined here does not included the process engineering contractors involved in major projects in, for example, chemicals, oil and gas, or infrastructure.
In 2000, the UK engineering sector had a turnover of almost £100 billion of which over 40% was exported. Mechanical machines and equipment alone had a turnover of £32 billion, around one third exported.
The sector is populated by a small number of large, and in many cases highly successful, companies and by a large number of SMEs. This latter group is integral to sectors such as automotive, aerospace, telecommunications, etc. Some are part of what can best be described as the High Performance Engineering sector – companies producing high added value goods and services, working for example in situations demanding extreme performance or which have safety-critical implications. UK companies are particularly strong in engineering design and project management activities and in the development and application of niche technology.
Engineering has not been identified as a priority across all regions. But some, such as West and East Midlands and North East and North West, have strong engineering clusters serving local industries. All regions have identified at least one engineering sub-sector as a priority.
Exports in the engineering sector have stagnated in recent years. The industry attribute this to factors including unfavourable exchange rates, in particular with Europe, our primary export market; competition from low wage economies; low profit margins leading to reduced investment in productivity and the skills shortage that has resulted from engineering still being seen as an unattractive career choice. The key element for success is raising productivity levels to those of our competitors.
In an attempt to overcome some of these difficulties many companies looking at overseas markets are moving away from direct exporting and examining the outward investment option.
The main export markets, understandably, are the major developed and developing markets world-wide. However the sector is so broad and many of the sub-sectors so interdependent that it is not possible to define priority markets for individual subsectors.
Electrical and optical equipment accounted for export sales in 1999 of £28 billion, marginally less than home sales. The industry employs around 120,000 people. The main export markets are the USA, Western Europe and the Middle East while those seen as offering the best prospects for future business are China and South East Asia, Latin America, India, South America, Central and Eastern Europe.
The manufacture of mechanical machinery and equipment generated a turnover of nearly £32 billion in 1999, around one third of which was exported. Key and future potential markets are similar to those identified above.
Process Engineering Contractors cover all aspects (including design) required for the complete execution of onshore projects for the processing industries including chemicals, oil & gas, electricity generation and food & drink. The UK has the second largest concentration of process industry contracting capability in the world. The industry's annual turnover is estimated to be about £14bn and exports account for around 50% of total business. The main overseas markets are the Middle East (63%), Western Europe (13%) and the Indian Sub-Continent (9%).
The UK's production and processing machinery industries enjoy export success in the traditional markets of Western Europe, and the majority have established themselves in the USA, whilst papermaking and textile machinery have also penetrated some South East Asian markets. Potential growth areas offering excellent opportunities for UK companies are Central and Eastern Europe (notably the Czech Republic and Poland), China, South America (notably Brazil) and, in the longer term, South East Asia. The most promising global export opportunities are in sectors such as metrology, plastics and rubber processing machinery, printing machinery, packaging machinery and textile machinery.
The United Kingdom's mining equipment industry comprises of up to 100 independent companies. These companies divide into those who provide systems/capital equipment and to 2nd and 3rd tier suppliers. ASociety of Maritime Industries (Association of British Mining Equipment Companies) represents the major suppliers into the underground mining sector predominantly trading in coal mining equipment but other mineral mining such as salt, gypsum and phosphates is serviced as well as an array of hard rock minerals. The 36 UK manufacturers within ASociety of Maritime Industries employ some 6,000 personnel both UK and overseas with an estimated additional 2,500 employed on a sub-contracting basis. The majority are small companies providing specialist products and services (such as electrical switch gear, cabling or bulk materials handling systems). A small number of larger companies supply mining systems, particularly Joy and Long-Airdox.
The sector's main area of expertise covers both underground and surface mining as well as mineral preparation equipment. Manufacturing for underground coal mining, which is a hazardous atmosphere operation due to the release of gas from the coal, demands experience and technical know how. The UK industry is particularly strong in both longwall and continuous miner operations, in addition to which flameproof electricity supply and control equipment is an area in which the British industry excels. UK industry strengths also lie in the development of more innovative, safer and environment-friendly mining equipment, particularly high quality equipment for the deep coal mining industry and as a knowledge base for large-scale domestic industry restructuring.
The opencast mining equipment manufacturers and mineral preparation equipment manufacturers are not at present represented by a trade association. ASociety of Maritime Industries is mindful of this fact and is developing wherever possible dialogue encouraging membership so that the sector is covered and promoted by one association as a whole.
The UK coal mining industry reduced in size dramatically in the early part of the 90's, however world markets have continued at a consistent production level to the point where UK companies now export double the amount manufactured in the UK. Due to the global increase in gas and oil prices, coal is now being looked at favorably again. The main markets such as South Africa, Australia, USA as well as China, India and Russia all major coal producers and procure British mining equipment.
Turnover figures for the year 2000 amounted to £200 million export and £100 million UK (ASociety of Maritime Industries members only). Statistics for 2001 suggest that these figures are to be exceeded by the end of the year.
The majority of this information was compiled from details supplied by the DTI.
