A new report by the Institute of Directors (IoD) shows a surge in manufacturing productivity growth in recent years.
The research claims that manufacturing productivity has increased three times as fast as in the whole of the economy between 2003 and 2005.
However, despite the productivity gains industry is still suffering – output in January 2006 was only 0.5% higher than in 2002, and manufacturing employment has fallen one million since 1997.
Graeme Leach, chief economist at the IoD, said the manufacturing industry is considerably more efficient now than it was at the beginning of the decade.
“Let’s hope the efficiency gains will be translated into improved output in the future,” he said. “To date, this has been disappointing.”
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The IoD report found that the surge in productivity performance has been most marked in the more advanced sectors.
Productivity in the transport equipment sector was up by 26% on 2002, in the machinery and equipment sector up 24% and in the electrical and optical sector up by 18%.
