Manufacturing output has been growing at an average rate of 1.2% over the last 20 years. Although employment in manufacturing is declining, replacement demand and the changing nature of the sector ensures significant demand for skilled labour. Investing in manufacturing skills is an investment for the future.

The skill problems in manufacturing are concentrated in particular industries and around certain types of skills. Skills policy needs to take account of the wide variation between industries and their particular needs. Broad, economy-wide targets have some indicative value, but they should not form the basis for deciding policy.

Structural change in the sector is increasing the demand for skills among manufacturing employers. The evidence suggests that possessing a level 3 qualification—two A-levels or their vocational equivalent—is increasingly becoming the base-line for employability in many manufacturing industries. Around half of the existing manufacturing workforce does not meet this standard.

We support the principle of a 'demand-led' skills strategy outlined in the Leitch report. 'Demand-led' should, however, reflect the needs of employees as well as employers. We have some concerns about the implementation of this strategy, for example the variable performance of Sector Skills Councils. We also believe that there is a need for simplifying public sector skills provision over and above the reforms outlined in the Leitch report.

Manufacturing faces significant problems attracting people into a career in the sector. Negative perceptions of the sector are too often found among young people, reinforced by inadequate careers advice. The sector has significant problems recruiting appropriately skilled graduates and recruits very few women. These problems are more complex than a simple lack of young people trained in science. We welcome the Manufacturing Forum's efforts in this area and believe that the Government and private sector should put more emphasis on promoting the sector.