London scoping - ukcip

7.7 Manufacturing
Final Report
179
7.7.1 Context
Whilst the sector has suffered a long term relative decline, manufacturing in London is presently
responsible for 300,000 jobs and £10 billion of output. It comprises 10% of all UK
manufacturing. London’s largest manufacturing industries are: food and drink, advanced
automotive, aerospace and precision engineering, as well as high-tech industries such as
pharmaceuticals, fibre-optics and computing. It is these industries which the draft London Plan
envisages consolidating and expanding to 2015.
In general terms, manufacturing businesses are most likely to be impacted upon by climate
change in the following ways, where the industry is dependent on climate-sensitive natural
resources, and their supply is affected:
Through consumer behaviour that is sensitive to climate variability;
Through transport disruption that affects just-in-time industrial processes.
7.7.2 Flooding and Rainfall Intensity Impacts
The economic costs of transport disruption were identified in the section above on transport.
The stakeholder feeling is that disruption to road and train modes from flood and storm damage
are likely to be the most costly for industry.
There was a stakeholder recognition that changes in water resource availability and/or prices in
the London region - highlighted above - may have impacts on certain industries in the city that
use large amounts of water in their manufacturing processes. The most likely impacted
industries are thought to be the drink sector (and particularly brewers) and the automotive
industry, though no work is known to have been undertaken on this issue.
7.7.3 Temperature Change Impacts
The effect of climate-induced changes in consumer behaviour are generally related to
temperature changes. The study by Palutikof et. al. (1997) of the 1995 hot summer provides an
analogue of how such conditions may impact on retailing and manufacturing in the future. They
found that there was a net cost to the retail market in total of £102 million (2002 prices), whilst
the loss for the clothing and footwear market was estimated at £410 million for the UK as a
whole. There was a small gain of £27 million in the fruit and vegetable markets. Clearly, these
types of effects have parallel knock-on impacts on the associated manufacturing sector.
A general point common to all the sectors included in this analysis - but perhaps particularly
relevant to the manufacturing sector - is that warmer weather in summer will result in more
uncomfortable working (and travel) conditions. This may have an effect on productivity, and an
adaptation strategy will need to weigh up these productivity costs against e.g. building
ventilation. As mentioned elsewhere, there may also be sectoral and geographical relocation
resulting from this climate change impact.