The Midlands is home to a substantial cluster of aerospace industry supply chains and R&D assets, one of the largest in the UK and Europe. However, traditionally, its extent and reach have been difficult to define and quantify, leading to uncertainty about its real economic contribution. Official statistics based on Standard Industrial Classification (SIC) codes clearly under-estimate its size because many aerospace companies are classfied as e.g. "manufacturers".
Quantifying the size of the aerospace sector in the Midlands, providing accurate information on the size of the industry through a bespoke bottom-up company-level database
Applying a measure that focuses on core aerospace industry supply chains and allows for consistency across the UK, the Midlands is home to 326 company sites that are either internationally recognised AS9100-accredited ‘Flying Parts’makers or AS9110- / AS9120-accredited ‘Maintenance, repair & overhaul / parts distributors’. These are effectively “gold standard” aerospace suppliers. Their sites are highlighted in the map below. This is more than double the share of UK aerospace sites (21% vs 10%) reported in official statistics.
The Midlands has 326 AS9100/ AS9110/ AS9120 accredited company sites, 21% of the UK total.
Companies and jobs across different parts of the specialist supply chain
A somewhat broader definition adds specialist manufacturing companies that are not required to be accredited to the AS9100/10/20 standard, as well as other technically specialist, ‘indirect’ suppliers like those offering ‘NADCAP’ special services. This gives a total of at least 524 firms at 595 business sites in the specialist Midlands aerospace supply chain. That is nearly three times the number quoted in official SIC code statistics (see left-hand chart below).
Using a rigorous statistical methodology to adjust total job numbers at these companies downwards to account for the fact that many also supply other industries, the 500+ companies employ 36,500 people in the region undertaking work for aerospace markets. This compares with the 20,000 jobs officially reported.
About half these jobs are at the Primes/Tier 1s, one third at AS9100 “Flying Parts” makers, and one sixth at other specialist aerospace sites (see Figure B). Many jobs at these companies are highly skilled and well-paid.
Numbers of sites, companies and jobs: comparing SIC data and our dataset
Regional economic multipliers reveal the aerospace cluster’s overall impact on jobs.
Technically specialist Midlands aerospace people and companies generate over £3.5bn Gross Value Added (GVA) for the Midlands economy. When we include regional economic multiplier effects, over 100,000 Midlands jobs and £5.3bn GVA are created by the revenue brought into the region by Midlands business success in global aerospace markets (see Figure D). This means that aerospace is responsible for 2.0-2.3% of the regional economy.
The extensive company dataset this project has created will be a rich resource for use in the sector regionally in the years ahead, providing a basis for an even deeper understanding of the Midlands aerospace cluster and its varied technical capabilities and diverse range of supply chain companies.
The Midlands aerospace cluster has a significant role to play in the wider UK aerospace context, accounting for 21% of UK aerospace sites and 36,500 jobs.
The success of Midlands aerospace companies and employees in global markets has a wider economic impact, generating more than 2% of the regional economy and sustaining over 100,000 jobs.
Quantifying the size and contribution of aerospace in the region
Official data (based on Standard Industrial Classification (SIC) codes) that UK national and regional bodies traditionally rely on suggest the Midlands has about 20,000 aerospace jobs (1/5 of UK) in 180 companies (1/10 of UK) across 225 sites. Aerospace is a difficult industry to quantify and SIC code data is widely recognised to be a poor foundation for policy making. Providing a more accurate assessment of the economic contribution of aerospace in the Midlands was therefore a key objective of the research.
Critical to achieving this was the development of a new, comprehensive and detailed dataset of all companies known to be part of - or serving - the aerospace industry in the region. We believe this dataset to be the first of its kind in the industry. It was collated through an extensive bottom-up methodology, which gives us the basis for an accurate understanding of the size and scale of aerospace in the Midlands in terms of businesses and jobs (see Methodology Annex).
Our dataset-driven method gives a more realistic foundation for assessing the aerospace contribution to the Midlands economy.
