Manufacturing productivity has grown by 2.8 per cent a year since 1948

Perception of manufacturing decline 'wide of the mark'

Perceptions that manufacturing is disappearing from the UK are "wide of the mark", says a new report showing that output has increased since the late 1970s.

The Office for National Statistics (ONS) said that there a "significant" fall in the workforce – only 8 per cent of UK jobs are now in manufacturing compared with 25 per cent in 1978 – but workers in the sector were significantly better skilled and more experienced.

Productivity has grown by 2.8 per cent a year since 1948 despite the fall in jobs, which has partly been caused by outsourcing. The textile industry suffered an 80 per cent fall in jobs between 1979 and 2013, compared to a cut of 40 per cent in wood and paper.

Speaking at an event in London today, Joe Grice, chief economist at the ONS, will say: "The manufacturing industry has changed markedly over the past 60 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.

"There are several factors at work: a better quality and more skilled workforce; 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."

Business Secretary Vince Cable said: "A strong manufacturing sector is vital to a balanced economic recovery. This report shows that recent pessimism about manufacturing has been misplaced: across British industry, more cars are rolling off the production line, British-made engines are keeping planes in the air and manufacturing is coming back from abroad.

"Our industrial strategy is paying dividends by giving business the confidence to invest and pave the way to recovery. We will continue to support businesses to secure more highly skilled jobs and a stronger economy."

Lee Hopley, chief economist at EEF, the manufacturers' organisation, said: "This analysis shows us exactly why UK manufacturing must be at the centre of a better-balanced economy.

"Its declining share of employment and output is only a small part of the story as industry generates skilled jobs, productivity growth and the innovation and investment that can help to boost UK competitiveness.

"While this is a story of the past, the right business environment for manufacturing and a focus on rebalancing will ensure the sector continues to have a positive impact on the UK economy."

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