Emerging from Recession - Manufacturing Leads the Way

A good economics piece in The Telegraph today which is of relevance for business students in their final revision.

The article explains that manufacturing output in the UK has grown in each of the last eight months. Britain’s factories are helping to lead the UK economy out of recession (whilst recent data suggests that the service sector has struggled to grow).

Successful exploitation of growth opportunities in emerging markets like China & India are part of the reason. Another reason is a reversal of the process of de-stocking (i.e. firms beginning to rebuild rather than reducing stock levels) which occured during the recession.

The third, and perhaps most important cause of strong demand for UK manufacturing is the low level of the Pound. Weaker sterling makes UK products relatively cheaper in international markets, although some will suffer from the flip-side - higher costs of imported raw materials and components.