LONDON: The manufacturing sector suffered a drop in output during April, dealing a blow to George Osborne ahead of his Mansion House speech, when he is expected to pledge to improve Britain’s ailing productivity.
Manufacturing production dropped 0.4% between March and April to leave the sector’s output only 0.2% higher than last April. The main culprit dragging down output was the pharmaceutical industry, which fell more than 0.3% over the month.
The previous government singled out the pharmaceutical industry as one of the UK’s top-performing industries and one that would enjoy unprecedented state support to improve skills and boost output. But even though several of the world’s largest pharma businesses are based in the UK, including GlaxoSmithKline and AstraZeneca, the manufacturing of drugs is shifting to Ireland, Spain and eastern Europe.
The chancellor is expected to say that tackling Britain’s poor record on increasing productivity since the financial crash will be a priority for the government, which aims to rebalance the economy away from the City and property speculation towards manufacturing and exports.
So far, efforts to increase the UK’s skills base and encourage businesses to invest in the latest processes and equipment has failed to boost productivity.
The aerospace industry offset much of the decline in other areas of manufacturing, with a 15% rise between March and April. The volatile chemical industry reversed a 1.2% decline in March with a 1.6% jump in April.
