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Re-industrialisation - A Commentary

Author

Listed:
  • Ken Coutts
  • Robert Rowthorn

Abstract

The share of manufacturing in UK employment and value-added at current prices ("value-added" for short) has fallen dramatically in recent years. This commentary investigates the feasibility of reversing this decline. The paper explores the implications of four scenarios over the next twenty-five years. These scenarios generate very different trajectories for the share of manufacturing in value-added. A stronger manufacturing sector would grow faster and generate more net exports. However, the share of manufacturing in employment or value-added would be unlikely to increase. Rapid labour-saving productivity growth in the manufacturing sector would limit the growth of employment in this sector despite rising output. It would also drive down the relative price of manufactured goods, thereby holding down the share of the fast growing manufacturing sector in value-added.

Suggested Citation

  • Ken Coutts & Robert Rowthorn, 2013. "Re-industrialisation - A Commentary," Working Papers wp454, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp454
    as

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    File URL: https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp454.pdf
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    References listed on IDEAS

    as
    1. Robert Rowthorn & Ken Coutts, 2004. "De-industrialisation and the balance of payments in advanced economies," Cambridge Journal of Economics, Oxford University Press, vol. 28(5), pages 767-790, September.
    2. Ken Coutts & Bob Rowthorn, 2009. "Prospects for the UK Balance of Payments," Working Papers wp394, Centre for Business Research, University of Cambridge.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    De-industrialisation; re-industrialisation; output shares; employment shares;

    JEL classification:

    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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