Press Story
Despite recent increases in employment in the UK, the number of jobs in manufacturing continues to decline. ippr warns that until this trend is halted - or better still, reversed - the UK economy will not rebalance in the way the Chancellor and the Governor of the Bank of England have predicted.
Tony Dolphin, ippr Chief Economist, said:
'A reversal of the decline in UK manufacturing will be an important element in the rebalancing of the UK economy. But the latest employment data show this is not happening, despite the export advantage from sterling's large depreciation in 2008. Now that the government has completed its spending review, it needs to focus efforts supporting growth in the manufacturing sector and in those parts of the service economy that export to other countries. The evidence so far is that the private sector, if left alone, will not generate the output and employment growth needed to rebalance the economy.
'Jobs in manufacturing have accounted for a steadily declining share of total employment over the last 30 years. This trend was only halted during the mid-1990s following sterling's sharp fall after its ejection from the exchange rate mechanism. During this period, export growth was strong, the current account deficit almost disappeared and employment in manufacturing grew in line with employment in the rest of the economy. Following sterling's decline in 2008, it was hoped that a similar pattern would repeat itself. So far though, while export growth has picked up with the global economy recovering from recession, the current account deficit remains stubbornly large and employment in manufacturing is still shrinking.'
Notes to editors
Data on workforce jobs by industry can be found in Table 6 of the ONS's monthly Labour market statistics release.
The following chart shows the share of manufacturing jobs in the overall workforce:
Manufacturing jobs as share of workforce (%, 1980-2010)
Contacts
Tim Finch, Director of Communications on 020 7470 6110 / 07595 920 899 / t.finch@ippr.org