Is there light at the end of the tunnel?

13 March 2006

A new report, published today by the Institute of Directors (IoD), highlights the surge in manufacturing productivity growth in recent years. It claims that manufacturing productivity has increased three times as fast as in the whole of the economy over the 2003-05 period.

The IoD says that it is cautiously optimistic about the outlook for manufacturing after the tale of woe in recent years; with output in January 2006 only 0.5% higher than in 2002, and manufacturing employment down one million on 1997.

Graeme Leach, Chief Economist at the IoD said:

"Manufacturing is not out of the woods, but it is undoubtedly considerably more efficient now than at the beginning of the decade.  Let's hope the efficiency gains will be translated into improved output in the future.  To date, this has been disappointing."

Encouragingly, the IoD report found that the surge in productivity performance has been most marked in the more advanced sectors.  For example, productivity in the transport equipment sector was up by 26% on 2002, in the machinery and equipment sector up 24% and in the electrical and optical sector up by 18%. "These are very big numbers", said Graeme Leach.