Engineering Skills Gap Costs UK Firms £5.2bn a Year, Enginuity Report Finds
New research from Enginuity puts a price on the engineering skills gap, with half of engineering and manufacturing SMEs affected. Here is what it found.
Engineers often say online that employers complain about skills shortages but will not train anyone. New research from Enginuity, the skills charity for engineering and manufacturing, puts a number on the engineering skills gap and suggests that, for smaller firms in particular, it is a costly problem.
The Cost of the Engineering Skills Gap
Enginuity’s Mind the Gap report, published in June 2026 with analysis by SQW, estimates that skills shortages and gaps cost UK engineering and manufacturing businesses about £5.2 billion a year (Enginuity).
For an affected business, the average loss could be up to around £110,000 a year, which Enginuity says is about 10% of its gross value added.
Half of Smaller Firms Are Affected
The research focused on small and medium-sized businesses. Around half of engineering and manufacturing SMEs reported skills gaps or shortages. The Manufacturer reported that 36% had skills gaps and 35% had skills shortages, and that firms with shortages typically had two to three hard-to-fill vacancies (The Manufacturer).
Where gaps exist, firms estimate that about one in five employees is affected.
Which Skills Are Missing?
Technical manual skills were the most sought after, cited by 74% of SMEs. That covers the hands-on work of machining, fitting, welding, maintenance and assembly. Demand is also growing for digital skills, leadership and softer skills such as communication.
The biggest cost, named by 41% of firms, was lost productivity. When you cannot fill a key role, work slows down or more experienced staff get stretched.
Why the Engineering Skills Gap Persists
Enginuity points to several causes working together: an ageing workforce, a limited pipeline of new talent, changing expectations about work and lasting misconceptions about careers in the sector. The ageing workforce was identified as the main underlying factor.
What Enginuity Recommends
The report makes six recommendations. Among them are exploring a skills tax credit, strengthening employer-led qualifications, improving careers education and scaling up successful regional partnerships between employers and colleges.
What It Means for Engineers and Job Seekers
For engineers with hands-on technical skills, this is good news for bargaining power. For people thinking of getting into engineering, it shows there is real demand, especially in smaller firms that may be more willing to train. Our engineering careers guides cover apprenticeships and graduate routes.
You can browse engineering roles on our vacancies page or our engineering recruitment hub. Employers struggling to fill technical roles can talk to our engineering team.
Engineering Skills Gap: Frequently Asked Questions
How much does the engineering skills gap cost?
Enginuity estimates that skills shortages and gaps cost UK engineering and manufacturing businesses about £5.2 billion a year.
How many engineering SMEs have skills gaps?
Around half of engineering and manufacturing SMEs reported skills gaps or shortages in Enginuity's research.
Which engineering skills are in shortest supply?
Technical manual skills were the most sought after, cited by 74% of SMEs, with growing demand for digital, leadership and soft skills.
What is Enginuity?
Enginuity is a skills charity for engineering and manufacturing, formerly the sector skills council known as SEMTA.
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