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Piecing together the Puzzle: Getting UK manufacturing productivity growth back on trend

Britain’s manufacturers are calling for a major boost to investment in the forthcoming Budget as part of a wide-ranging effort to fire up the industrial strategy and tackle the UK’s long-standing productivity puzzle.

The research highlights the UK’s weak productivity performance compared to major competitors and highlights five key factors which help explain the growing gap over the past decade: capital investment, use of labour, company size, source of revenues and management practices.

The research also contains new evidence suggesting foreign owned companies are more productive compared to domestic owned firms and that the gap between them is growing compared to competitors. This leaves the solution to our flat lining productivity resting partly on ensuring we continue to benefit from the good practice and scale of foreign-owned manufacturers and shoring up capability in smaller, domestic companies – which are retaining some of the scars from the financial crisis.

 

Available resources

Industry report / Business performance