UK Manufacturing is Booming, or is it?
Yesterday saw the release of some good news for the UK economy with the manufacturing sector ending the year on a high.
The snow may have knocked high-street sales last month, but on Britain’s industrial estates the recovery continued unabated. That’s the conclusion research firm Markit has drawn in its latest monthly survey of purchasing managers. Markit’s headline UK manufacturing index – closely watched by economists as a leading indicator of industrial growth – hit a 16-year high in December.
Whilst is undoubtedly good news, if the Coalition is hoping that a manufacturing renaissance will see Britain through the cuts they may be disappointed.
Whilst the sector may be enjoying the strongest growth since the mid 1990s there is a big difference between then and now. Back then the sector employed around 4.3m people, whilst in September 2010 manufacturing employment dropped below 2.5m for the first time on record (table 6 of December’s Labour Market Stats).
Manufacturing employment is down 3.7% on the previous year and since the coalition took power, with its stated aim of rebalancing UK growth, 20,000 manufacturing jobs have gone.
Reversing this trend could take some time: