UK Politicians “underestimate” manufacturing

Updated on Friday 28 June 2019, 12:25 PM

2 Minute Read

The size and value of Britain’s manufacturing sector is far larger than official government figures suggest.

That’s the key finding in a new report called “Inside the Black Box of Manufacturing” which was carried out by Cambridge University of behalf of the Department of Business, Energy and Industrial Strategy (BEIS).

It says the official statistics which say manufacturing accounts for 9% of national income are based on inaccurate and outdated figures, and although it doesn’t give a new figure one of the authors of the report puts it closer to 15%.

The report say the reason for the difference is because the current method of measuring the size of the manufacturing sector doesn’t recognise that the economic value of manufactured goods increasingly depends on other activities which are officially categorised in other areas of the economy.

In most instances these are technical services such as R&D, analysis, industrial design and testing.

The two men responsible for producing the report – Dr Jorstein Hauge and Dr Eoin O’Sullivan – say their findings underline the dangers of a no-deal Brexit with a larger part of the economy vulnerable to EU tariffs, and argue against those economists who say service industries can replace jobs lost in manufacturing and agriculture.

Dr O’Sullivan says “It is essential that policymakers have accurate information on the size of manufacturing sectors in order to develop an internationally competitive industrial strategy”.

In a warning to the government Dr Hauge says “If the way manufacturing-related activities are counted does not change, the UK could be missing significant opportunities to build world-leading industries”.


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