Understanding the Electronics Sector

In the last few years, the UK electronics sector has been buoyant.

The manufacture of electronic components, devices, and equipment has played a big role in improving the health of the overall UK manufacturing sector.

Recently, the UK electronics sector has experienced the fastest growth of any manufacturing sector, with two thirds of all UK manufacturing being fuelled by the electronics industry.

Whilst still only accounting for a small amount of the total UK manufacturing sector (approximately 5%), the electronics industry is seeing its market size increase steadily. Annual revenue for the electronics sector has increased for four of the past five years. 

The key reason for this growth has been the steady increase in demand for electronic products by other sectors in the UK. As we all become more technologically reliant, several other key industries have increased their demand for electronic components. 

This success has attracted the interest of a number of overseas companies, many of whom have sought to invest in British-based electronics companies. Amongst foreign investors, the US has made the biggest contribution to the sector. Its total investments in the UK account for 44% of all foreign-owned electronics companies.

Behind the US, Germany has a 10.3% share of the UK market, with Japan in third place with a share of 7.6%.

The presence of overseas companies has positively affected turnover for the industry. The UK electronics sector has a higher share of companies with a turnover of more than £1 million than other non-electronics manufacturing industries. For the electronics sector, these companies account for 22.9% compared to 18.8% of the wider manufacturing sector.