The aluminium industry is a vital part of the UK manufacturing sector. The strategic importance of this lightweight and highly recyclable metal looks set to increase as the UK economy moves towards more sustainable and circular models of production and consumption.
In this second instalment of our wider aluminium industry report, we update our estimation of the contribution of the wider aluminium industry with the most recent data and expand the scope by including a larger share of aluminium castings. We also discuss our efforts in, and the challenges of, estimating the economic contribution of aluminium to the UK automotive sector. We estimate the gross value added (GVA) contribution of aluminium in UK passenger vehicles to be approximately £1 billion. We however caution the official use of this figure in the absence of more detailed data.
COVID-19 had a predictably negative effect on the output of the wider aluminium industry in 2020. Despite this, our estimation of the direct GVA contribution from the wider aluminium industry has remained similar to the figures we previously presented for 2019.
Economic indicators for the wider aluminium industry
- The wider aluminium industry directly employs 39,000 people across the UK, with the largest share of those employed located in the West Midlands.
- The wider aluminium industry directly contributes around £2.9 billion in GVA to the UK economy.
Economic impact of the wider aluminium industry
The wider aluminium industry is closely tied to many other parts of the UK economy. The production and manufacturing of aluminium goods requires purchasing from suppliers, supporting output, and employment across the UK.
Our economic model of the UK has been used to estimate the amount of economic activity supported directly and through spill-over impacts. We find the wider aluminium industry:
- Supports the employment of 104,000 full-time equivalent (FTE) jobs across the UK.
- Supports the contribution of £7.4 billion in GVA.
This blog presents the executive summary of the Aluminium Industry in the UK report. The report was produced in collaboration with the Aluminium Federation (ALFED). ALFED represents producers and other key stakeholders operating within the wider aluminium industry.
To read the full report on the economic contribution of aluminium to the UK economy click here.
Authors
Jack is an economist at the Fraser of Allander Institute.
Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.