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September 09, 2008

Comments

Matthew

On the other hand (and this isn't true of the last 10 years or so) output has trebled since 1948, so can recession really have been the 'normal' condition in that period and manufacturing in trend decline?

PJ

This ignores the fact that manufacturing output has risen hugely in every G8 country, with the exceptions of Italy and the UK, in the last decade. The UK is the exception, not the rule.

UK manufacturing output rose steadily under the last Conservative government (contrary to myth), but hasn't risen at all in the last 10 years thanks to the high pound and rising costs in the UK where businesses that have to compete internationally are taxed to pay for the public sector. Traded goods volumes worldwide have increased hugely in recent years (and most of these need to be manufactured) - but the UK has only fully joined in on the import side, hence the huge balance of payments deficit. Contrary to popular belief, the value of traded services is comparatively small and in the long term we are only likely to be able to continue to enjoy imported goods if we either manufacture more goods for export or replace imports with home manufactured goods.

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