The UK and manufacturing
Manufacturing surrounds us – without the vast array of man-made products that we take for granted, modern life would be impossible.
Many people today assume that few if any of these products are made in the UK, but this is far from the truth. The UK remains a more important manufacturing nation than many believe although its position has declined faster than is good for the economy.
De-industrialisation – manufacturing’s shrinking share of the UK’s economic output – has gone far enough. If we are to have sustainable economic growth and higher living standards, Britain must re-industrialise.
Making things in the world economy
Manufacturing has become harder to define because many companies both make products and offer services to support them, for example Rolls-Royce, which builds aero-engines and provides maintenance and spare parts as an after-sales service to its customers.
Separating manufacturing and services across the whole British – or world – economy is therefore becoming more difficult.
In spite of this, official statistics illustrate the long-term trends. In almost all the major advanced economies, manufacturing’s share of employment and overall output has fallen dramatically over recent decades. But the decline in the UK has been sharper than most. Between 1970 and 2013, the share of manufacturing in UK output, measured at current prices, fell from 27 per cent to 10 per cent. In Germany, its share declined from 34 per cent to 22 per cent. It has been a similar story in many other countries.
