Tony Posted January 29, 2012 Share Posted January 29, 2012 Useful graph. I think that Brazil has leapfrogged us very recently, but it underlines how strong UK manufacturing is. Link to comment Share on other sites More sharing options...
FairDooz Posted January 29, 2012 Share Posted January 29, 2012 ... it underlines how strong UK manufacturing is. How strong IS UK manufacturing??? I'm trying to get a grip on this issue. Manufacturing as a percentage of GDP has fallen from 40% in 1946 to something like 13% now. It's a long term trend however, it doesn't necessarily mean overall manufacturing output has fallen, it could simply mean other areas of the economy have grown faster. The "value added" graph included above requires some explanation ... and the figures are unreadable The graph from 2001 doesn't tell us much about what's happening now. The article from 2010 is perhaps a little more relevant, but it still cites data which ends in 2008. More recently ... "A report compiled by the GMB union has revealed that more than 700,000 manufacturing jobs have been lost in the UK since the recession. The latest figures show that manufacturing employment slumped from 3.5million in 2006/07 to just 2.8m last year, with more cuts being announced in recent weeks." http://www.eurekamagazine.co.uk/article/39837/GMB-calls-for-urgent-action-over-manufacturing-job-losses.aspx However, that's EMPLOYMENT in manufacturing. As processes become more efficient, fewer people are needed. The figures for manufacturing employment alone don't give us the full picture. So, with some (very) old academic articles and other figures cherry picked to make political points, it's very difficult to get an objective measure of how well we're doing. What does seem to be clear is that we're running an unsustainable trade deficit with the rest of the world. We don't value manufacturing nearly as much as we should. Financial services suck up the country's best talent creating an unbalanced ecnomy. Our productivity levels relative to our competitors give no room for complacency. Relying on exchange rates for competitive advantage isn't a great long term strategy. We need to value mechanical, electrical, civil, chemical and bio-engineering much more and to be much more suspicious of "the "smoke and mirrors" tricks of "financial engineering". Do we have cause for concern for our manufacturing industries? I would say so. The evidence for the case that UK manufacturing is strong and growing is weak or non-existent. Link to comment Share on other sites More sharing options...
purdy Posted January 29, 2012 Share Posted January 29, 2012 How strong IS UK manufacturing??? I'm trying to get a grip on this issue. Manufacturing as a percentage of GDP has fallen from 40% in 1946 to something like 13% now. It's a long term trend however, it doesn't necessarily mean overall manufacturing output has fallen, it could simply mean other areas of the economy have grown faster. The "value added" graph included above requires some explanation ... and the figures are unreadable The graph from 2001 doesn't tell us much about what's happening now. The article from 2010 is perhaps a little more relevant, but it still cites data which ends in 2008. More recently ... "A report compiled by the GMB union has revealed that more than 700,000 manufacturing jobs have been lost in the UK since the recession. The latest figures show that manufacturing employment slumped from 3.5million in 2006/07 to just 2.8m last year, with more cuts being announced in recent weeks." http://www.eurekamagazine.co.uk/article/39837/GMB-calls-for-urgent-action-over-manufacturing-job-losses.aspx However, that's EMPLOYMENT in manufacturing. As processes become more efficient, fewer people are needed. The figures for manufacturing employment alone don't give us the full picture. So, with some (very) old academic articles and other figures cherry picked to make political points, it's very difficult to get an objective measure of how well we're doing. What does seem to be clear is that we're running an unsustainable trade deficit with the rest of the world. We don't value manufacturing nearly as much as we should. Financial services suck up the country's best talent creating an unbalanced ecnomy. Our productivity levels relative to our competitors give no room for complacency. Relying on exchange rates for competitive advantage isn't a great long term strategy. We need to value mechanical, electrical, civil, chemical and bio-engineering much more and to be much more suspicious of "the "smoke and mirrors" tricks of "financial engineering". Do we have cause for concern for our manufacturing industries? I would say so. The evidence for the case that UK manufacturing is strong and growing is weak or non-existent. UK manufacturing is running at near record levels and in real terms (value adjusted to todays money) is around double the output of 50 years ago. It is just another of those myths being peddaled by the anti thatcher lobby. http://www.pwc.co.uk/pdf/UKmanufacturing_300309.pdf Link to comment Share on other sites More sharing options...
Mecky Posted January 29, 2012 Share Posted January 29, 2012 UK manufacturing is running at near record levels and in real terms (value adjusted to todays money) is around double the output of 50 years ago. It is just another of those myths being peddaled by the anti thatcher lobby. http://www.pwc.co.uk/pdf/UKmanufacturing_300309.pdf If you're going to make sweeping statements like that at least provide some evidence. Link to comment Share on other sites More sharing options...
purdy Posted January 29, 2012 Share Posted January 29, 2012 If you're going to make sweeping statements like that at least provide some evidence. Is the link a bit too tricky for you??:hihi::hihi: Link to comment Share on other sites More sharing options...
MrSmith Posted January 29, 2012 Share Posted January 29, 2012 Is the link a bit too tricky for you??:hihi::hihi: Its 40 pages you can't expect Mecky to read it all. Link to comment Share on other sites More sharing options...
purdy Posted January 29, 2012 Share Posted January 29, 2012 Its 40 pages you can't expect Mecky to read it all. I thought he could at least look at the pictures.:hihi: Here's a clue. Try page 6 and see how much manufacturing output increased during the 1980s. Link to comment Share on other sites More sharing options...
FairDooz Posted January 29, 2012 Share Posted January 29, 2012 UK manufacturing is running at near record levels and in real terms (value adjusted to todays money) is around double the output of 50 years ago. It is just another of those myths being peddaled by the anti thatcher lobby. http://www.pwc.co.uk/pdf/UKmanufacturing_300309.pdf I did come across this report before my post but had doubts about the neutrality of PWC. That aside, I'd say there is some cause for hope in the report, but it's not all good news ... From the Executive Summary ... It is undeniably true that in the UK, the manufacturing sector is in relative decline. Over the past 30 years manufacturing output has grown more slowly than services, and the number of people employed in manufacturing has dropped steadily as productivity per employee has increased. The sector faces a number of serious challenges, from the long-term threats posed by emerging markets, to the current economic downturn which is affecting manufacturers in high-wage and low-wage countries alike. Perhaps most seriously, Britain has a highly negative balance of trade (total exports minus total imports) that is not sustainable. I think the following quote is also cause for concern. We don't value our engineers: ‘There’s no glamour in entering the engineering industry. The respect and regard that an engineer gets in Germany is off the scale compared to the UK’ FTSE 100 CEO Link to comment Share on other sites More sharing options...
wednesday1 Posted January 29, 2012 Author Share Posted January 29, 2012 I did come across this report before my post but had doubts about the neutrality of PWC. That aside, I'd say there is some cause for hope in the report, but it's not all good news ... From the Executive Summary ... It is undeniably true that in the UK, the manufacturing sector is in relative decline. Over the past 30 years manufacturing output has grown more slowly than services, and the number of people employed in manufacturing has dropped steadily as productivity per employee has increased. The sector faces a number of serious challenges, from the long-term threats posed by emerging markets, to the current economic downturn which is affecting manufacturers in high-wage and low-wage countries alike. Perhaps most seriously, Britain has a highly negative balance of trade (total exports minus total imports) that is not sustainable. I think the following quote is also cause for concern. We don't value our engineers: ‘There’s no glamour in entering the engineering industry. The respect and regard that an engineer gets in Germany is off the scale compared to the UK’ FTSE 100 CEO Excellent post, informed comment on SF, whatever next! As I recall manufacturing accounted for over 80% of the UK's GDP until 1979, by the time the Conservatives were gone in '97, it had fallen to around 19%, which fell under Labour to around 14%. The fact that Labour did nothing to attempt to reverse the rot and feeling of hopelessness for those involved in manufacturing was for me, the greatest disappointment of New Labour (plus that stupid war). It would be nice to think that that now the chickens have come home to roost, and that the Thatcher service sector dream has turned out to be the emperor with no clothes, that the wealth creating manufacturing sector would be given a more elevated profile by the Govt, however the Forgemasters loan debacle and the awarding of the Thameslink rail contract to a German firm instead of the old BREL in Derby, don't exactly fill me with much hope! Enjoyed your other posts Fairdooz, hope you stick around. Link to comment Share on other sites More sharing options...
Tony Posted January 29, 2012 Share Posted January 29, 2012 Excellent post, informed comment on SF, whatever next!) So what's this nonsense? As I recall manufacturing accounted for over 80% of the UK's GDP until 1979, by the time the Conservatives were gone in '97, it had fallen to around 19%, which fell under Labour to around 14%. Can you explain why a negative balance of trade is unsustainable? Link to comment Share on other sites More sharing options...
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