The manufacturing sector has provided some disappointing figures lately, suggesting a downturn in the industry impacted by poor economic growth throughout the Eurozone. But according to the Office of National Statistics (ONS), perceptions that manufacturing may be disappearing from the UK are wide of the mark.
In fact, the ONS reports that total manufacturing output has grown since the 1970s, even though the number of employees has decreased significantly from 25% of the UK’s workforce in 1978 to just 8% this year. The ONS acknowledged, however, that manufacturing had declined in size relative to other sectors, revealing that between 1948 and 2013, shares in manufacturing fell from 36% to around 10%.
Joe Grice, chief economist for ONS, said: “The manufacturing industry has changed markedly over the past sixty years. It is becoming more productive, despite a steady fall in the number of people employed and broadly stable capital stock, and economic downturns in the 1970s, early 1990s and notably 2008-9.”
Joe Grice’s analysis, revealed at an event for business and government in London earlier this week, shows that productivity in the manufacturing industry has risen by 2.8% a year since 1948, compared with 1.5% in the service industry. The growth is largely attributed to a more skilled workforce, and bolstered by the advancement of technology.
Grice added: “There are several factors at work: a better quality and more skilled workface; a shift from the production of low to high productivity goods; an improvement in the information technology base; more investment in research and development and a more integrated global economy. Exporting firms generally are associated with higher productivity and foreign-owned firms in the UK generally experience higher productivity than domestic firms.”
