UK Manufacturing Slowed, but Remains Well Above Average

Manufacturing has been on the minds of policymakers around the world ever since American President Donald Trump began talking about tariffs and protections for manufacturing in his country. This sector of the economy has often been in decline in Western countries that have moved towards services and the knowledge economy. Many news stories have been made about the implications of this shift for laborers and consumers. However, countries such as Britain still have a robust manufacturing sector. Recent reports suggest that the death of British manufacturing may not come for a long time.

The atmosphere of growth

Recent reporting indicates that the British manufacturing sector has continued to grow year over year. This growth is far from any 20th century peaks or considerable increases. It also helps Britain stand out over many of its competitors on the global stage. Despite Trump's rhetoric, manufacturing in the United States has struggled in recent years and shows no signs of wholesale improvement. But Britain has escaped a few of those negative trends. A recent report from CBI Industrial Trends show that 30% of firms have reported increases in their output over the past three months compared to 17% that believed their recent output had decreased.

These numbers were gathered through a survey of over 300 manufacturers that represent a cross section of the British manufacturing sector. The increases in output did not mark a significant increase from last year or even last quarter. Domestic price growth and capacity remained similarly tepid. However, the report also asked about the optimism of future months. This optimism was more homogeneous. Manufacturers had a much higher level of expected future output in the form of orders. They had increased their employees and had cut through their inventories. Manufacturers reported few problems filling orders and continuing their output at increased rates over the short-term. Output will only continue to increase as a result.

Reasons for success

What accounts for this shift in the prospects of British manufacturing? Why has the service economy not completely taken over the island yet? For starters, currency prices have been favorable to British factories. The pound has fluctuated considerably in recent years. After the shock of the Brexit vote in 2016, the pound has steadily decreased in value. A lower pound makes products produced in Britain more affordable. This status for British companies is compounded by general weakness in the European economy. A number of European economies are suffering through either a long-term recession or a political crisis. Italy has faced a governmental collapse and Germany may not be far behind. Their weakness opens up possibilities for the expansion of British factory output.

Another critical factor for the expansion of the British manufacturing sector is the price of oil. The price of oil has increased steadily in the past year. Higher-priced oil makes goods that have to be hauled thousands of miles across the open oceans of the world more expensive. Oil prices can therefore increase the prices of products from Asia and North America for the European market. Britain can gain a competitive advantage for manufacturing products both for its domestic market and for the European market.

This quarterly report points to the future potential of the manufacturing sector in Britain. Continuous success means that more foreign companies will view the country as an attractive option for their advanced manufacturing procedures. High-tech products such as solar panels and phone components will gain a greater foothold in the United Kingdom beginning with some of these positive reports.

The call of British manufacturing and competent manufacturing policy has the possibility of recalling outsourced companies. Companies that previously relocated to low-wage countries may decide to return if they know that the British government can provide benefits that those cheaper countries cannot. A high-tech manufacturing foothold can attract all sorts of other forms of manufacturing.

An economic herald?

The recent quarterly manufacturing report is a sign to British policymakers. It may be one of the first considerable signals to open the floodgates for foreign companies to set up large factory complexes in Britain. Manufacturing may provide high-wage jobs and resulting service sectors that maintain, advertise, and sell the products being produced. Having a more diversified economy can therefore make Britain more self-sufficient and increase its leverage for the products that it does decide to trade. But this report is not completely benevolent. Some manufacturers in Britain are still struggling. Not all of them have hired people or branched out into the most advanced fields.

The report also points to still-lingering resentments over the Brexit vote. A number of manufacturing officials remarked on their fears of trade boundaries and the possible conflicts between the United Kingdom and the rest of Europe. While manufacturing still has its position in the British economy, Brexit may be the factor that influences its future.

Further Information...

Find out more about us and our products by calling us on 01327 311144 or emailing us at sales@die-pat.co.uk

How to Clean and Descale a Commercial Dishwasher

Ensuring that you serve your customers on clean crockery is just as important as the food you serve. No matter how mouthwatering and enticing your menu is, presenting even the most delicious... > More

Commercial Kitchen Cleaning Tips

According to the latest study by the Food Standards Agency (FSA), the most prevalent foodborne pathogen in the UK is Campylobacter. This microorganism is responsible for approximately 280,000 cases... > More

Commercial Kitchen Lighting Requirements and LED Lighting

Well-designed and properly implemented lighting is vital in any commercial kitchen if the staff are going to efficiently and safely perform their tasks of food preparation, cooking, presentation... > More