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The Decline of British Manufacturing, 1973–2012: The Role of Total Factor Productivity

Published online by Cambridge University Press:  01 January 2020

Richard Harris  and
John Moffat
Richard Harris*
Affiliation:
Department of Economics and Finance, Durham University Business School
John Moffat*
Affiliation:
Department of Economics and Finance, Durham University Business School
*
E-mails: r.i.d.harris@durham.ac.uk; john.moffat@durham.ac.uk
E-mails: r.i.d.harris@durham.ac.uk; john.moffat@durham.ac.uk
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Abstract

This paper uses plant-level estimates of total factor productivity covering 40 years to examine what role, if any, productivity has played in the decline of output share and employment in British manufacturing. The results show that TFP growth in British manufacturing was negative between 1973 and 1982, marginally positive between 1982 and 1994 and strongly positive between 1994 and 2012. Poor TFP performance therefore does not appear to be the main cause of the decline of UK manufacturing. Productivity growth decompositions show that, in the latter period, the largest contributions to TFP growth come from foreign-owned plants, industries that are heavily involved in trade, and industries with high levels of intangible assets.

Keywords

total factor productivitymanufacturingdecompositionD22D24L6
Type
Research Articles
Information
National Institute Economic Review , Volume 247 , February 2019 , pp. R19 - R31
Copyright
Copyright © 2019 National Institute of Economic and Social Research

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Footnotes

This work contains statistical data from ONS which is Crown copyright and reproduced with the permission of the controller of HMSO and Queen's Printer for Scotland. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation of analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates. Supplementary material for this article is available online.

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