UK Manufacturing in Biggest Boost for a Decade
Last month it was reported that the manufacturing sector in Britain is growing at its fastest rate since 2008. There was a seventh consecutive month of growth in November 2017, thanks to exported goods such as cars and other projects in the renewable energy sector.
While it was good news for British manufacturing on the whole, a breakdown into individual sectors shows a different picture. While industrial output rose by 0.4%, construction output fell by 2% in the months leading up to November, compared with the previous three months. At the end of 2017 the majority of sub-sectors were enjoying growth. So what does this say about post-Brexit Britain?
It sounds incredibly positive – this is the biggest boost for the manufacturing sector in ten years. The USA, China and Europe are all performing strongly at the same time. The main reason why the market for UK manufacturing is growing is because of a weak pound – initiated from the Brexit referendum.
While the weaker currency isn’t good news for the overall economy, it does encourage investment from abroad because bargains can be had. The fall in value of Sterling has made UK exports more competitive, so as a nation we’ve been able to export more goods. For example, car exports have risen sharply which have contributed to the overall growth. With most British manufacturers exporting over half of what they make, this is why there is a significant rise in output.
A promising global economy has also played a part in the sector growth. With a positive world outlook, especially in the main global economies such as the US and China, manufacturing companies have been given an extra boost. If overseas customers are enjoying an increase in business, that then feeds back into UK production.
Is it too early to get excited and take this as a sign that the UK economy will be strengthened by Brexit? Probably. Manufacturing only accounts for 10% of the British economy, and certain sub-sectors within it are still struggling. Then there’s the argument about labour in the manufacturing industry post-Brexit, as the sector relies heavily on migrant workers.
However, it does prove that the future may not be as bleak as predicted. Nevertheless, the boost may be short lived and new trade tariffs could wreak havoc on the UK’s exports. As a British manufacturer, we’re making sure we respond and adapt quickly to any changes as a result of the Brexit process, to mitigate the risk.
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