UK Manufacturing V Rest of the world

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There hasn't been a shortage of positive manufacturing data since the beginning of the year, with the sector being one of the few bright spots in the economy at the moment. Exports have played a big role in recent growth a manufacturers capitalised on pre-recession efforts to enter new markets. Equally the rebounding global economy and world trade growth has benefitted manufacturers across the globe.

Research published in the FT at the weekend showed that the recovery in UK manufacturing was lagging behind that of our competitors. Industrial output growth in countries such as Japan and Brazil far and away exceeded that in the UK in 2010, with the author noting that the UK would be sliding down the world's manufacturing league table in the years to come.

That's the thing about statistics - they can tell you a lot, but depending on how you cut them, they can also tell you anything at all. Looking at one year's growth says little about the severity of recession just passed, or indeed the starting point for recovery. For example, despite the very strong growth in Japanese manufacturing output in 2010, there still remains a lot of ground to be made up to get back to pre-recession levels of activity.

But instead of quibbling about the maths, we should consider what else these statistics might be telling us. Manufacturers the world over are all going to a bigger slice of a growing global cake. And an export-driven recovery is not only vital to UK economic growth, but many other developed (and emerging) economies are also chasing positive contributions to growth from trade.

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Chief Economist

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