Manufacturing industry in crisis Why has manufacturing sector plunged into a decline?

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Manufacturing industry in crisis

The manufacturing sector has been in recession since January 2001 with outputs declining month by month. Manufacturing is about making products from raw materials by hand or machinery. There is sometimes confusion about which companies belong to the troubled manufacturing sector or to the service industry which support manufacturers and sometimes even sprung from them . an example of this is TNT which offers a logistics service for manufacturers.

Why has manufacturing sector plunged into a decline?

With the increase in the international trade and the strong pound, British exports are more expensive than other international goods. This has resulted in a poor image reducing investment and there it make it difficult to modernise and attract new blood. Also cheaper labour costs abroad have encouraged Companies to move production operations to Eastern Europe or Asia. " Britain is a rich country- we don't want to do repetitive things with our hands," says professor Tim Congdon, chief economist at Lombard Strret research.

" We should do unique and specialised tasks requiring the use of our brains."

The type of manufacturing firms are still competing effectively.

The main types of manufacturing companies that are competitive are in the aerospace, high technology and pharmaceutical industries and also the car production. The largest is the productionin of food, beverages and tabocca.

Future hope for the UK manufacturing firms

Confederation of British Industry ( CBI ) expects the manufacturing output to increase again by 2003 although there is no certainty. Many economists predict in the long term, there will be a shift into more high-tech manufacturing which is less labour intensive as UK will find it increasingly difficult to compete with lower wages in places such as China and India.

The CBI's Mr Scott argues that manufacturing underpins the economy by...