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UK manufacturing slumps to 17th place in world league

By John Dunn , 02-Jul-2010

A report out last month on global manufacturing competitiveness ranked the UK 17th in the world. Even worse, the report, from Deloitte and The US Council of Competitiveness, predicted that the UK would fall to 20th place in five years time, just ahead of Ireland and Italy.

The report comes as pressure mounts on the government to target the UK's manufacturing industry with a new strategy focusing on investment for the future and on the complete manufacturing supply chain rather than just production.

Having abolished the nine competing Regional Development Agencies (RDAs) in the Budget, the government needed to put together a strategic plan to create clusters of manufacturing specialisms in the areas that the UK leads, such as food, said Robin Johnson, partner at international law firm Eversheds.

With the demise of the RDAs, existing food manufacturing clusters, such as those in East Anglia and the North West, could be in jeopardy. "I am not convinced that the old RDAs delivered in terms of return on investment," said Johnson. "But they do need to be replaced by something else. Manufacturing cannot be left in limbo."

There were fundamental challenges facing the food industry in the UK such as greener labels, health concerns, climate change, and the effects of increasing populations on sustainability, he added. "There needs to be a fundamental review of the food industry and the government needs to identify where the money needs to go."

There was a myth about manufacturing that production was particularly important, said Andy Neely, director of the Advanced Institute of Management Research, following its launch of a new study, Ten myths about manufacturing. "We have to recognise that there is much more to manufacturing than the production process. The design, distribution, storage and resale of products are fundamental."

The Manufacturing Institute has also warned UK manufacturing not to talk itself into an early grave with a new booklet aimed at dispelling the top ten myths about UK manufacturing.

"Raw materials and sustainability continue to be major issues for food manufacturers with inflation and the weak pound causing the biggest concern, constantly squeezing margins," it said. "There appears not to be much concern about the importation of finished goods, the so-called Aldi effect," it added.