UK aerospace businesses grow R&D spending by more than any other sector

The UK aerospace industry has grown its R&D spending by more than any other sector, the latest ONS data has revealed.

Aerospace businesses increased their spending on research and development by £210m, according to the latest statistics for 2018 released last week.

This was a rise of 14%, taking total R&D spending by aerospace businesses to £1.7bn.

However, the sector is still some way off the industry’s high of £2.2bn set in 2005, analysis by R&D tax relief specialist Catax shows.

The sector’s R&D investment bottomed out at £1.4bn in 2010 and 2011 and recovered as high as £1.9bn in 2016 before dipping again to £1.5bn in 2017.

The amount that UK businesses across all sectors have invested in R&D continues to grow, rising £1.4bn to £25bn in 2018 — up 5.8%.

Manufacturing was associated with £16.3bn of R&D spending, up 4.7%, but pharmaceuticals remained the biggest product group with £4.5bn of R&D spending, up 3.3%.

The telecoms sector plotted the largest percentage increase in R&D spending, climbing 25.4% to £947m.

The number of staff employed by UK businesses also continued to grow, rising 7.3% annually to exceed 250,000 full-time equivalents for the first time.

Mark Tighe, chief executive of R&D tax relief specialists Catax, said:

“The aerospace industry has flown over the head of software development to become the sector posting the biggest absolute gains in R&D spending.

“This will go some way to silencing many doubters who try to paint the nation as being on the back foot. This is a global industry with a very international focus and this is as much a symbolic as an accounting trend.

“This is the second full year that Brexit Britain has shrugged off the political poison after the EU referendum and posted great gains in terms of R&D investment, running head and shoulders above the long-term average.

“For the first time in history a quarter of a million people nationwide are engaged full time in keeping the UK at the cutting edge. This is going to make a huge difference to Britain’s prospects outside the EU.

“The rate at which UK businesses are adding R&D staff to the workforce remains impressive, virtually matching the previous year with a rise of 7.3%.”

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