British manufacturing output rose by 1.3 percent in the fourth quarter of 2017, the second strong quarter growth in a row, which according to analysts helped push GDP growth in the quarter to 0.5 percent above expectations.
The British manufacturing sector, once known as ‘the workshop of the world’ has seen its output steadily fallen as a share of the overall economy. Employment in industry has tumbled, especially in the past 20 years. Competition from Chinese imports has destroyed jobs in once-thriving parts of the country such as Blackburn.
Lately, however, things have been looking up again. Manufacturers large and small are bullish. Boeing, an American aerospace company, recently broke ground on a new facility in Sheffield, to be its first in Europe. Alpkit is an outdoor-clothing company, which makes 15-20 percent of its wares in-house. In November it opened a new factory in Nottingham, customising boulder pads, backpacks and bags for its discerning customers.
Analysts say the turnaround could have been the results of the efforts of the coalition government of 2010-15, which was keen on getting universities and manufacturers to work closely together.
“Those efforts are paying off. The Boeing facility will take on 19 apprentices, who are being trained at the Advanced Manufacturing Research Centre in Rotherham, a joint initiative between the company and Sheffield University,” they pointed out.
External factors are also said to play a bigger role. Manufacturing being an export-intensive business might have benefited from the world economy, which is enjoying its first synchronised upswing since 2010.
Equally, the pound’s fall since the Brexit referendum of 2016 is an added bonus, making firms’ wares cheaper in foreign markets. Alpkit’s exports, to everywhere from Australia to America, are growing at 50 percent a year, says David Hanney, its chief executive.
Politicians hope that the revival in manufacturing will benefit Britain’s “left behind”. But a small currency fall does not suddenly make labour-intensive, unskilled work competitive again. Manufacturers have continued a long-standing trend of employing relatively fewer workers with low or no qualifications. Instead it is firms that employ skilled workers that are on the up. The share of manufacturing workers with postgraduate degrees rose from 15% to 18% in the past year alone.
Rebalancing may continue. Despite Brexit, bosses are investing heavily: in 2016 purchases of industrial robots rose for the first time in five years. Surveys suggest that firms’ order books are full up. But if politicians believe that the spoils will be shared equally, they will be disappointed.