Make UK, the manufacturers' organisation and business advisory firm BDO LLP, have published a new analysis of regional manufacturing performance.
The annual Make UK/BDO Regional Manufacturing Outlook highlights manufacturers' contribution to economic regions of the UK in terms of output, jobs and investment.
According to the analysis Wales (almost two thirds), the North East and Yorkshire & Humber (both 60%) have a very high exposure to trade with the EU.
Combined the critical contribution of manufacturing to the economy overall in Wales and the North East is way above average (17.5% and 15.2% respectively), the risks of 'no deal' are likely to be felt disproportionately by these areas in particular.
The East Midlands is also not too dissimilar with manufacturing accounting for almost a fifth of its economy and the EU being its biggest market accounting for just over half its exports.
For the first time the analysis also shows a clear correlation between regional performance and exposure to industry sectors and global trends and structural change.
London and the South East was the best performing region in the last year and is now an emerging industrial powerhouse being the second largest manufacturing region worth £28.1bn annually. This is due to its high exposure to the electronics sector benefitting from the increasing global trend towards investment in 4IR related technologies such as robotics and artificial intelligence.
Other star performers were the North West which remains the biggest region in terms of output (£28.5bn), as well as the most productive with high value sectors such as automotive, aerospace and pharmaceuticals.
The East Midlands was the most improved region over the last year in terms of output, with a high exposure to the food and drink sector which is not just the biggest manufacturing sector, but was also the second most improved sector in terms of increased exports.
By contrast the ongoing difficulties in the automotive sector are having an ominous impact on manufacturing and those regions most closely linked to it. This impact is being seen in worrying declines in output, orders and collapsing investment levels. This has notably impacted on the West Midlands and the North East which have reported weak future investment and recruitment plans.
Stephen Phipson, Chief Executive at Make UK, said: "Although Brexit stockpiling put manufacturing on steroids for a little while, the industry has since gone almost cold turkey and the overall picture over the last year now shows Brexit, global trade wars and the economic downturn in major markets are menacing UK manufacturers.”
"In particular, there are some regions of the UK with a very high exposure to trade with the EU and who are likely to suffer a disproportionate double whammy to their economies and jobs from a damaging 'no deal' exit.
He adds: “Policymakers need to be on high alert to deal with the fallout from this to ensure manufacturers do not suffer collateral impact as a result. This underlines why we strongly support calls for the Government to agree s deal with the EU which protects and supports British manufacturers.”
Tom Lawton, Head of Manufacturing at BDO, added: “The survey makes it clear that regions heavily reliant on the automotive industry will be more significantly impacted by a no-deal Brexit. The contributions of these manufacturers to the UK’s economy should not be underestimated.”