ML-Implode News - Britain is Posterchild for Manufacturing Neglect Leading to Economic Malaise

It's being blamed on the Brexit jitters. But the weakness in the UK economy that the latest figures reveal is actually a symptom of a much deeper malaise. Britain has never properly recovered from the 2008 financial crisis. At the end of 2015, inflation-adjusted income per capita in the UK was only 0.2% higher than its 2007 peak. This translates into an annual growth rate of 0.025% per year. How pathetic this performance is can be put into perspective by recalling that Japan's per capita income during its so-called "lost two decades" between 1990 and 2010 grew at 1% a year.
At the root of this inability to stage a real recovery is the serious imbalance that has developed in the past few decades -- namely, the over-development of the UK financial sector and the atrophy of manufacturing.
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This is remarkable, given that the value of sterling has fallen by around 30% since the crisis. In any other country a currency devaluation of this magnitude would have generated an export boom in manufactured goods, leading to an expansion of the sector.
... despite the relative increase in the importance of services, the manufacturing sector is still -- and will always be -- the main source of productivity growth and economic prosperity. It is a sector that is most open to the use of machines and chemical processes, which raises productivity. It is also where most research and development, which generates new technologies, is done.

Moreover, it is a sector that produces inputs that raise productivity in other sectors. For example, the recent rise in productivity in the service sector has happened mainly because it is using more advanced inputs produced in the manufacturing sector -- computers, fibre-optic cables, routers, GPS machines, more fuel-efficient cars, mechanised warehouses and so on.

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Britain is Posterchild for Manufacturing Neglect Leading to Economic Malaise