Santa’s little UK based helpers…

As Santa gears up for his annual global trek bearing gifts for children young and old, my thoughts turn idly to the elves that spend all year busily manufacturing the products that are loading on the sled. Contrary to popular belief many of these elves might actually be situated in the UK. To borrow heavily on the words of Mark Twain, rumours of the death of UK manufacturing have been greatly exaggerated.

UK manufacturing is on a roll. According to the November Purchasing Managers Index (PMI) the sector grew at its fastest rate for 16 years. There has been record growth in employment in the sector. The Engineering Employers Federation have said that the manufacturing sector will outperform the rest of the economy next year and that firms were powering ahead, recruiting staff and investing in their businesses. Manufacturers were ending the year on a high and expecting to enter 2011 on a strong footing. Very impressive indeed.

Manufacturing currently accounts for 13% of UK GDP. OK in Germany it is 24% but the figure in France, which is fiercely protective of its indigenous industries, is broadly the same as in the UK and in the US it is lower. We are unlikely to get back to the 30% level of the 1970s, but given that the last ten years has seen manufacturing output fall by 11%, the rebalancing that we are starting to experience is very welcome if long overdue.

Historically UK manufacturing has always been about harking back to the past rather than looking to the future, an approach characterised by forlorn attempts to protect the heavy industries of the past. This attitude has led talented graduates looking elsewhere for their career options. With the tarnishing of the financial services industry, and a touch more glamour surrounding high tech specialised manufacturing hopefully we are starting to see a real change in attitude towards the sector.

So as we struggle with the packing and wire ties that seem to accompany our Chinese made toys this Christmas morning, we should also look forward to a gradual increase in “Made in Britain” goods emerging from wrapping paper in future years. A little ray of sunshine to offset the wintery conditions the country is facing at present.

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