The annual economic study by UK Music and its members showed that the music industry continued to grow last year across almost every sector, up by £100m on 2016.
Recorded music saw a rise of nine percent to £700m and music publishing grew by seven percent to £505m.
Live music contributed around £1bn to the UK’s economy, while UK music industry exports rose by seven percent to a record £2.6bn, thanks to the success of acts including Ed Sheeran, Dua Lipa, Rag’N’Bone Man, Stormzy, Harry Styles and Depeche Mode.
The growth also contributed to a three percent rise in music jobs, with a new high of 145,815 people now working in the industry.
Commenting on the figures, UK Music chief executive Michael Dugher said: 'British music brings enjoyment to millions and makes a massive contribution to the UK. I’m really proud of the fact that these figures show once again that when it comes to music, we in the UK are very, very good at what we do.
'We are a global leader in music and we continue to grow faster than other parts of the British economy and to punch well above our weight.
'Music exports are a particular British success story, and organisations like PRS for Music and PPL that help ensure creators and investors see a return for their work have also performed particularly strongly in 2017.
'These figures show what can be achieved when we choose to back the British music industry.'
Speaking of the challenges the industry faces, Dugher said: 'Every child from every background should have the opportunity to access music, to experience its transformative power and to try out a career in the industry if they want to - regardless of whether or not they have access to the Bank of Mum and Dad.'
He added: 'That’s why we need further government support to help us ensure we produce the next generation of world-leading British talent by backing music in education, protecting grassroots music venues and making sure that creators are properly rewarded for their work. If we do that, we can be even more successful in the future.'
Minister for Digital and the Creative Industries Margot James said: '2017 was a very successful year globally for the UK music industry. Ed Sheeran’s third album ÷ (Divide) was the biggest selling album of the year.
'The O2 in London was officially the most popular live music arena in the world. Five of the top ten most successful worldwide tours were from UK acts. 2018 is proving to be no different.
'We need to build on these achievements and as the Minister responsible for the creative industries I am firmly committed to doing just that.'