Sector Overview

The mechanical sector covers companies that manufacture a wide range of machinery and equipment that is used in many industries which include:

machinery for the production and use of mechanical power – for example steam or gas turbines, marine engines and their components
pumps, taps, valves, compressors and components such as bearings and gears
weapons such as tanks and other fighting vehicles and ammunition
machine tools and machinery used in the manufacture of domestic and industrial products

The mechanical equipment sector, more than any other sector that Semta represents, depends on the success of other industries. Segments of the mechanical equipment sector are integral parts of supply chains as subcontractors for the aerospace, automotive and shipbuilding sectors.

Key facts

274,300 people are employed in the mechanical equipment sector.
The sector needs over 67,000 people to replace those retiring or leaving their jobs between 2005 and 2014.
The mechanical equipment sector is characterised by small firms: 73% of sites employ between 1 and 10 people.
Skilled craftspeople who have completed a trade apprenticeship make up 30% of the workforce.
12% of the workforce have no qualification.
32% of the workforce do not have a qualification at S/NVQ Level 2 or above.
24% of people working in the sector hold a qualification at S/NVQ Level 4 or above. This is below the average for all sectors in the UK.
23% of sites have skills gaps.
20% of sites have hard-to-fill vacancies.
An annual growth rate in employment of –1% is predicted for the sector.

Future outlook

The need to engage in lean manufacturing techniques to improve productivity and competitiveness is a key challenge to the sector. Many mechanical companies are already implementing ‘lean’ and ‘5S’ principles but their use is not as widespread as in other sectors that they supply.

As customers at the top of the supply chain demand better quality, lower costs and on-time delivery, mechanical equipment manufacturers will be forced to adopt process improvements.

In response to change, companies are looking to increase productivity by:

Focusing on added value.
Batch rather than mass production.
Separating the design and marketing of products from production.
Automating production.

These will all give rise to skills changes in the next two or three years. High volume, low value work will keep moving overseas and demand for higher-level skills will increase.

People and skills

Although overall employment is declining, there is still a need for the sector to recruit – particularly managers, skilled craftspeople and operatives. A lack of technical and practical engineering skills is the major cause of skill-related problems. The biggest skills gap is in CNC machining. Strategic management, entrepreneurship and technical skills such as advanced design skills are crucial to improving productivity. There is also a need for the current workforce to have skills that make them more flexible and adaptable.

By 2014 skilled craftspeople and operatives are expected to make up a lower proportion of the workforce. High-value work will bring opportunities for more managers, professionals and technicians. Support occupations within the sector such as administration, sales and customer service will also grow.