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Reports of the death of British manufacturing are exaggerated. Employment in the sector may keep falling, but that is as it should be

By Tim Leunig   November 2010

In 1980, one in four British workers was employed in the manufacturing sector. Today, fewer than one in 12 is. The number of manufacturing workers has fallen from 6.5m to 2.5m over this period. Britain, it seems, no longer produces anywhere near enough things. Last year Peter Mandelson, then business secretary, said we needed less financial engineering and more real engineering. The present government appears to agree.

But the argument is fallacious, and the policy implications are wrong. Britain produces more manufactured goods than at any time in its history—because although there are fewer workers in the sector, each is…

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