Its common knowledge in the U.K that manufacturing has declined over several years but the attached graphic illustrates just how serious that decline is compared to other leading nations. The situation after the credit crunch is likely to paint an even grimmer picture.

But why should anyone care ?   Does it reallly matter if we are making things or providing services instead ?

The fact that Japan, Germany, France and most leading nations are emerging from recession before the U.K may give some indication of that importance.

Manufacturing provides highly skilled jobs which are well paid. This leads to more purchasing power for the economy as a whole.

Also, for every job in manufacturing another 10 may be created in support functions and in the supply chain.

But, can we still afford to manufacture in the U.K ?

Anyone who has done a Business Plan for an engineering project should have realised that, when considering modern manufacturing equipment, direct labour cost is virually insignificant. What has a massive effect is the COST OF CAPITAL and therein lies the biggest clue to our problems.

If we want to prosper in the U.K with a fare distribution of wealth and an effective social care structure we need a vibrant, mixed economy of which manufacturing is a major key component.

This can only happen if Goverment has an effective manufacturing strategy with a good supply of reasonably priced Capital investment.

That is the challenge for Government of whatever persuassion.

chris@amberhill.biz