Deindustrialization

There's one aspect of yesterday's manufacturing output figures (pdf) that hasn't received attention - they confirm that output has stagnated for years. Since Q2 1974 (admittedly a cyclical peak), manufacturing output has grown just 9.3%. That's 0.3% a year.
You might think this is normal deindustrialization. Manufacturing is best done in low-wage wage countries.
However, UK output has lagged way behind other high-wage economies. Here are some comparative growth rates in industrial production (which include output by utilities and oil companies) since Q2 1974:
UK = 30.7%.
France = 39.0%
Italy = 43.8%
Japan = 84.9%
US = 141%.
The UK's disadvantage isn't merely a quirk of the time period. Even over the last 10 years, output has grown more slowly in the UK than, say, France.
You can see why European governments don't appreciate lectures from Blair on the merits of Anglo-Saxon capitalism; in terms of industrial growth, the success of Anglo-Saxon economies is a US story, not a UK one.
Why has the UK lagged behind? That's a long story. Years ago, one manufacturer put it this way: "I don't know why we've lost so much market share over the last 30 years. I mean, we're making the same things now we were then."

Comments

[Alex]

Be interesting to see what they flog off with the float of QinetiQ - at least, if you're a 60s British aviation industry nostalgist..there are all kinds of odd things in the hangars at Boscombe Down and Farnborough from when we used to make things that weren't the same.

Those figures are even more depressing when you think they include North Sea oil production - the period you discuss includes the whole run-up from 1975 to the peak year, 1999, so the underlying figure for industrial production must be even worse.

But naturally, we'll easily be able to export enough ringtones and corporate lawyers to pay for the liquified natural gas imports, no?

[angry_economist]

Would they include NS Oil production? I doubt it - this is usually classified as an extractive primary industry with coal etc and is not conventionally classified as manufacturing output.

The only manufacturing output attributed to oil and gas would be fabrication of vessels, platforms, pipes etc.

However - these figures shroud some interesting features. E.g the Sheffield steel industry produces more output than it ever did, with a much smaller workforce. So lets not get too gloomy.

[chris]

Angry - the industrial production figures include oil output; the manufacturing ones don't.

[angry_economist]

oh well then we're just no good at making stuff any more then are we?!

is this particularly a bad thing? perhaps, perhaps not.

[rjw]

angry makes a good point. I wonder in that context about the extent of linkage between the evolution in industrial structure and rising regional and personal income inequality.

[bam bam]

this info is boring