UK manufacturing output is at its highest in two and a half years

Considering manufacturing was verging on extinction at the beginning of the recession, it is now staging an impressive show of strength. But we're still way behind on exports.

by Emma Haslett
Last Updated: 09 Jun 2014

‘Tis a glorious day for ‘Made in Britain’ fans, after the Office for National Statistics published figures showing manufacturing output grew by 1% in February from January, pushing its year-on-year growth up to 3.8%. Basically, manufacturing output is now at its highest level in two and a half years. Hurrah.

This was largely driven by pharmaceuticals, transport equipment, food, beverages and tobacco (probably one the government would rather not shout about).

You’ve got to give a certain amount of credit to the government for this: one of its first priorities was to make manufacturing a major driver of growth, using a combination of tax breaks and incentives.

Lo and behold, it seems to have managed it. Car manufacturing in particular is one of the UK’s great industrial success stories: in January, figures by the Society of Motor Manufacturers and Traders showed production rose 3.1% in 2013, meaning we’re close to pushing France out of its spot as one of the top three European car manufacturers.

One thing we’re still way behind on, though, is exports – ie. ways to sell all that stuff we’ve just made. It’s telling that our top three export markets are the US, Germany and the Netherlands – rather than fast-growing markets like China, Russia and Brazil.

In his Budget speech, George Osborne said he wanted to change that, altering the way export finance works so it is ‘the most competitive in Europe’ and dropping air passenger duty. But figures by the ONS in March showed the UK’s current account deficit – how much the value of the goods and services the UK imports exceeds the value of its exports – was at £22.4bn in the final quarter of 2013. Which suggests we still have a long way to go.

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