£6.5bn loss to economy if UK sees fall in engineering grads

A decline in engineering graduates could wipe £6.5bn from the UK economy by 2035, according to new analysis by the Centre for Economics and Business Research (Cebr) and STEM workforce consultancy SThree.

The sector is currently projected to contribute £83bn to the nation’s economy by 2035, but a drop in engineering graduates of just 2% would see that figure would fall to £77bn.

The UK already faces engineering workforce pressures – Skills England has identified skills shortages in the sector as a constraint on growth. Meanwhile the UK’s pipeline of engineering graduates lags behind many of its peers. The UK saw just 9% of graduates enter engineering, manufacturing or construction-related fields – 5% less than the G7 average of 14%.

The warning comes as ministers look to engineering-intensive sectors, from clean energy infrastructure to transport networks, to support the next phase of economic growth.

The findings are part of the STEM Skills Outlook, a global study examining how changes in the supply of STEM talent could affect economic growth across more than 40 economies

Rakesh Patel, UK Managing Director at SThree, said: “When we talk about engineering skills shortages, the reality is more complex than a simple lack of candidates. Employers are competing for experts in areas like advanced manufacturing and grid infrastructure, where talent can take years to develop.

“So even a very small slow in the number of engineers entering the workforce can have long-term, outsized consequences as gaps emerge for high-tech roles that can’t be filled overnight.

“Capability in the sector has become a key factor in economic competitiveness, and countries that can develop and retain specialists will be better placed to deliver major projects, adopt new technologies and attract investment.”

Sam Miley, Head of Forecasting and Thought Leadership at Cebr, said: “Decisions about education made today often take years to show up in economic data. A 2% shift in graduate numbers may sound marginal, but when it affects a sector that so greatly supports productivity and innovation, the impacts accumulate over time.

“The risk is not that growth stops altogether, but that it falls short of what would otherwise have been possible.

“By the time employers and the economy begin to feel the full impact, underlying workforce trends have usually been in place for years.”

The findings are part of the STEM Skills Outlook, a global study examining how changes in the supply of STEM talent could affect economic growth across more than 40 economies.