The current vogue for heralding the recovery of the British manufacturing should not lead us to complacency about the very real difficulties currently faced by the sector. George Osborne’s budget offered one or two fairly substantial measures to support manufacturing, allocating £7 billion to lower manufacturers’ energy costs, and doubling the investment allowance. But by failing to tackle the key obstacles to making real his “march of the makers”, there is little to suggest a genuine resurgence is on the cards.
In the lead-up to the budget, we were subject to a steady stream of “good news” about manufacturing in the UK. Most of these stories arise from the media’s tendency to report the statistical output of regular surveys to a regimented timetable, without seriously questioning the importance of tiny monthly or quarterly fluctuations, or the validity of the measures themselves.
Economic activity in virtually all sectors invariably creeps forward in normal circumstances – but consistent improvement from a very low base is not a sign of success. The most remarkable aspect of this story is that it comes so long after the recession ended; that the recovery has been so tardy suggests profound problems with the British economy and manufacturing in particular.
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