Manufacturing in the doldrumsOur love/hate relationship with manufacturing is being tested. Alex Mayhew-Smith writesIt seems that the UK has always had an uneasy relationship with manufacturing.
The country was one of the first nations to embrace the industrial revolution with allthe associated benefits and drawbacks. The social divide between workers and bosses, andthe low level of working conditions make it seem a backward revolution in retrospect.
Now the UK's manufacturing base is in decline and may never recover to the samelevels again.
Back in September Anthony Parish, director general of the Federation of the ElectronicsIndustry (FEI), said amidst heavy job losses in the electronics sector that the reductionin manufacturing jobs is likely to be permanent.
"Simple manufacturing work is going off-shore at an increasing rate," he toldElectronics Weekly. "This is a long-term structural change that will last for anotherthree or four years. We are going to loose in terms of overall employment in themanufacturing sector."
Confirming the situation last week, the Office for National Statistics revealed thatmanufacturing investment has fallen to its lowest level for seven years. Investment inmanufacturing fell 13 per cent in the third quarter compared to the previous three months.
On top of this the Confederation of British Industry (CBI) said the hit onmanufacturing would last longer than it previously thought. The CBI particularly pointedto the situation in high-tech industries.
"Manufacturing output is expected to fall further in the coming months... Thelargest falls are expected in aerospace, electronic and electrical engineering and metalmanufacture," said the CBI.
Sudhir Junankar, CBI associate director of economic analysis, said: "Expectationsof a further fall in output confirm that manufacturing will remain in recession into theNew Year."
In the longer term, says Parish, the answer may be to "keep climbing thevalue-added slippery pole, trying to substitute higher-grade work for what is lost".
Welsh firm IQE hitched itself up that pole recently with the announcement that it wouldbe producing prototypes of new compound semiconductor-on-silicon wafers, licensed fromMotorola. If the product proves successful with customers the firm could be one of the fewelectronics manufacturers set for growth.
The firm is certainly advancing the technology and with a 15 month exclusivityagreement could gain several feet over rivals on that slippery pole.
More generally, Parish's metaphor begs the question what will happen whencountries that are taking manufacturing work from the UK catch up in the technology race?Is there really nothing better for humanity to do than turning an endless treadmill inpursuit of the next device or gadget?
As product lifetimes are shrinking, perhaps firms that peddle intellectual propertyhave got it right by always concentrating on the next technology. But if this is the wayforward, it could leave a lot of manufacturing staff without work.