The Effect of Britain’s Recession on Manufacturing

Published On: 21st September 2012

The state of Britain’s manufacturing sector remains on the downward spiral after it was revealed that there had been a drop in output.

Earlier this month, data was published by the Office for National Statistics showing that there had been a 0.7 per cent drop in manufacturing output between March and April 2012.

This came as an unexpected disappointment with a previous report showing a 0.9 per cent increase in the output.

The statistics confirms that Britain is still very much in a recession that could extend throughout the summer and beyond.

While a 0.9 per cent decrease doesn’t sound particularly significant, the statistic becomes all the more concerning when you consider that industrial production – of which two-thirds is made up of the manufacturing sector such as formwork and scaffolding suppliers – had been boosted by weather factors.

As previously stated, the results come as a blow after business data from April had hinted that Britain’s factories were in line for an increased run of production that would in turn help the country’s economy.

However, this predicted has failed to come to fruition and now Britain faces a further drop in the value of gross domestic product.

It had been hoped that the manufacturing sector would provide the formwork for a move away from the recession as it had been in the 1980s and 1990s. However, in spite of a 25 per cent reduction in the value of the British pound, the manufacturing sector has failed to become the same catalyst this time around.

Figures seem to confirm this with the sector 8 per cent below its pre-recession peak.

To make matters worse, the North Sea – which can act as a compensator for manufacturing – is running dry with oil and gas extractions down by a staggering 41 per cent from this time four years ago.

With the manufacturing area struggling, it could be down to other industry sectors to help Britain come out of the recession.