Food and drink has only seen 27% of the investment that transport and engineering has over the last 20 years. Despite this, GVA in food and drink manufacturing has increased 149%, compared to 163% in transport and engineering in the same period (Chart: Investment and GVA by UK industry over time). The respective Compound Annual Growth Rate (CAGR) of GVA in each sector has been 2.0% in food and drink manufacturing vs. 2.5% in transport and engineering manufacturing.
When compared with transport and engineering, food and drink manufacturing has generated more value added per unit of investment over the last 20 years 6 . For every £1 invested, £9 has been returned in food and drink manufacturing, compared to £5 in transport and engineering (Chart: GVA to investment ratio by UK industry over time). As more investment is made, we expect it to have a diminishing return which is reflected in (Chart: GVA to investment ratio by UK industry over time). Looking at a shorter time horizon over the last five years, food and drink manufacturing returned £7.40 to every £1 invested, vs. £3.80 in transport and engineering, demonstrating 1.95x greater return potential in food and drink manufacturing.
Investment and GVA by UK industry over time
Investment and GVA in the last 20 years (axes in £m)
£80,000
£30,000
£60,000
£20,000
£40,000
£10,000
£20,000
£-
£-
2004 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Food and drink manufacturing investment (£m)
Transport and engineering manufacturing investment (£m)
Food and drink manufacturing GVA (£m)
Transport and engineering manufacturing GVA (£m)
GVA to investment ratio by UK industry over time 8
£10 £12 £14
£0 £2 £4 £6 £8
2004 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Food and drink
Transport and engineering
Food and drink last 20 years average
Transport and engineering last 20 years average
6. Gross fixed capital formation (GFCF) has been used as the investment variable. 7. Data sourced from: Business Investment by Industry and Asset, Office for National Statistics (2024)UK GDP (low-level aggregates), Office for National Statistics (2024) 8. Ratio of investment per employee and GVA per employee for each industry over the past 20 years. Data sourced from: Business Investment by Industry and Asset, Office for National Statistics (2024), UK GDP (low-level aggregates), Office for National Statistics (2024), JOBS03: Employee jobs by industry, Office for National Statistics (2024), JOBS04: Self-employment jobs by industry, Office for National Statistics (2024)
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