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Dr Patrick McLaughlin
Dr Patrick McLaughlin
UK manufacturing growth
UK Manufacturing growth: challenged
UK Manufacturing
10th in the world 50% of
UK export market10% of GVA Unstable
Growth
Identify the key factors explaining unstable growth
Identify estimated contribution of UK Manufacturing
Aim of the Study
• Over 250 relevant articles out of 900 from Factiva database
• Analysis of key words using NVivo software
• Data collection from
• Validation by experts
Research Methodology
Unstable Growth: Root Cause Analysis
EnablersInhibitors
6
0%
5%
10%
15%
20%
25%
7
Top ten enablers over the last 25 years
Top ten inhibitors over the last 25 years
Inhibitors
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Top 3 enablers & inhibitors over the last 25 years
1990 2016
The 90s
2000-2006
2007-2009
2009-2015
High interest rate
Decline of labour
High export demand
High domestic demand
Transport industry
Strong pound
Overseas competitiveness
Expensive oil
Low interest rate
High domestic demand
High export demand
Expensive oil
Recession in UK
Weak overseas demand
Low interest rate
Transport industry
Weak pound value
Recession in UK
Reform of accounting policies
Lack of investment opportunities
High export demand
High domestic demand
Weak pound value
50
60
70
80
90
100
110
120
130
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Canada France Germany Italy Japan United Kingdom USA
UK against G7
Index of GVA value (2007=100)
0
20
40
60
80
100
120
140
France Germany Italy Japan UK USA
1991=100
Average of manufacturing growth index over the last 25 years
Manufacturing
sector
Merely production
The process of physical or
chemical transformation of
materials, substances or
components into new products.
Current
Definition
The current definition of manufacturing
Based on the UK SIC Code
2007, the manufacturing
sector (sector C) is divided
into 24 divisions
UK SIC Code 2007 :
Standard industrial classification of economic activities 2007
Manufacturing SIC codes
In reality, production is often only one aspect of the manufacturing process.
The whole value chain also includes -
Design, logistics and service activities.
The value chain of manufacturing
Extended Definition of Manufacturing
Design-Make-Support framework
Traditional manufacturing business strategies based around the sale and production/making of a particular product.
Manufacturing involving the sale andproduction/making of a productcombines with associated design andsupport activities.
To measure manufacturing-related design-make-support
activities across all economic industry and develop a new
index for manufacturing growth
Focus on: Design- make- support
Revised SIC code selection methodology
Step 1 Step 2 Step 3
SIC code
selection
+
Selected
manually
Develop the
Extended
Manufacturing
Growth
Index (EMGi)
SIC code
percentage
estimation
+
Validation by
experts
12
14
16
18
20
22
2008 2009 2010 2011 2012 2013 2014
x 1
00
00
Current GVA Extended GVA
Extended Manufacturing GVA v Current GVA(£million)
Extended Manufacturing Growth index (EMGi)(2008 = 100)
90
92
94
96
98
100
102
2008 2009 2010 2011 2012 2013 2014
Current GVA Extended GVA
Motor vehicles
grows just behind
ships& boats
Repair and installation also has a significant growth
Textile & leather goods and
Pharmaceutical shows an obvious
decline
Ships&boats and Aircraft shows the highest growth
EMGi across all divisions
Top 5 inhibitors are strong pound, weak overseas demand, high interest rate, recession in the country and global economic slowdown
UK Manufacturing includes companies providing design, make and support activities
UK Manufacturing economic contribution is currently under valued by around £50 billion per year
Conclusions
White Paper & Manufacturing Debate Report
www.national-manufacturing-debate.org.uk
