What problem with manufacturing?

6474
what-problem-with-manufacturing

Woes is us, we don't make anything any more.

We get this all too frequently, that manufacturing in the UK has declined so much, that we're over reliant upon services, that simply we've too few northerners making things that can be dropped on feet, that, in short, we're all stuffed.

That we all know that the value of manufacturing production has been rising, even as it shrinks as a portion of the economy, doesn't seem to clinch the matter. For we're still told that the decline of manufacturing as a portion of the economy is some dreadful fate.

alt

OK, so it has indeed been falling as a percentage of GDP. Is this a bad thing?

alt

Hmm, well, it doesn't really seem so, does it? Or at least if it is, then we're in good company. For as you can see (and don't worry too much about the absolute numbers, they might not be calculated in quite the same way, just look at the trends), manufacturing is falling as a percentage of the global economy all over. And we know very well that global manufacturing output isn't falling: so it must be just that other parts of the economy, services obviously, are growing faster than manufacturing.

At which point it becomes terribly difficult to worry about what percentage of the UK economy manufacturing is or isn't. For as we know, GDP is the "value of goods and services". The total amount of value produced that we can share out in some or another manner. It matters not whether that value is created by building jet engines or painting women's nails: it's still value created, an increase in wealth and that is rather the point of this whole thing, isn't it?