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The Changing Shape of UK Manufacturing

The Changing Shape of UK Manufacturing. Joe Grice, Director and Chief Economist. Outline. Why is productivity important? Manufacturing output, employment and productivity Potential reasons the increase in manufacturing productivity: A better quality workforce

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The Changing Shape of UK Manufacturing

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  1. The Changing Shape of UK Manufacturing Joe Grice, Director and Chief Economist

  2. Outline • Why is productivity important? • Manufacturing output, employment and productivity • Potential reasons the increase in manufacturing productivity: • A better quality workforce • An improvement in the information technology base • A change in the composition of the UK manufacturing industry • Investment in research and development • Capital deepening • Amore integrated global economy • Productivity growth by export status • Productivity growth by firm ownership

  3. Current price Gross Value Added per hour and hourly wage Source: Labour Productivity Measures from the ABS :

  4. Labour productivity (output per hour) 1948-2013, (1948=100) Source: Labour Productivity (ONS) :

  5. Whole economy and manufacturing output and workforce jobs Source: Index of Production (ONS), Gross Domestic Product (ONS) & Labour Market Statistics (ONS) :

  6. PRODCOM sales growth, (average annual growth, 2002-2013, %) Source: UK Manufacturers’ Sales by Product(PRODCOM) :

  7. Reduction in manufacturing jobs between 1979 and 2013 (%)   Source: Labour Productivity Statistics (ONS) :

  8. Contributions to change in Gross Value Added, 1994-2012 Source: Multi-factor Productivity (ONS) :

  9. Labour quality by industry (1993=100) Source: Quality Adjusted Labour Input (QALI) :

  10. Percentage of manufacturing hours accounted for by qualification Source: Quality Adjusted Labour Input (QALI)

  11. Percentage of manufacturing hours accounted for by age Source: Quality Adjusted Labour Input (QALI)

  12. Contribution to manufacturing sub-industries productivity growth Source: Labour Productivity (ONS) and Labour Market Statistics (LMS)

  13. Average annual labour productivity growth by ICT maturity Source: Annual Respondents Database (ARD): Annual Business Survey (ABS), E-commerce survey, and Community Innovation Survey (CIS)

  14. Job flows out of the manufacturing industry: 2002 to 2013 Source: Labour Force Survey Microdata

  15. Net capital stock and output per hour Source: Capital Stock and Labour Productivity

  16. Research and development expenditure as a proportion of turnover, % Source: UK Business R&D Publication (ONS)

  17. Average annual labour productivity growth by exporting status (% per annum, 2001 to 2010) Annual Respondents Database (ARD): Annual Business Survey (ABS), E-commerce survey, and Community Innovation Survey (CIS)

  18. Average annual labour productivity growth by firm ownership, (% per annum, 2001 to 2010) Annual Respondents Database (ARD): Annual Business Survey (ABS), E-commerce survey, and Community Innovation Survey (CIS)

  19. Conclusion • Manufacturing productivity has risen across a broad range of sub-industries, from textiles to pharmaceuticals. Due to steady output growth and a noticeable fall in employment. • A range of factors are having an impact – such as labour quality and capital deepening. This presentation has been designed to inform and encourage the debate around manufacturing productivity – not provide a comprehensive and definitive explanation.

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