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Government urged to do more to improve manufacturing productivity

Manufacturing has continued to perform well in the face of uncertainty following the Brexit vote, exports are on the increase and economic growth in general is picking up. However, the EEF has taken the opportunity ahead of the spring budget to urge Chancellor Philip Hammond to do more to aid productivity in the manufacturing sector.

Ms Lee Hopley, Chief Economist for the EEF, said:

“This Budget must drive ahead with the productivity-focused commitments that we saw in both the Autumn statement and the government’s recent industrial strategy green paper. Action that enables more innovation, more investment and supports better skills and infrastructure in the economy are not optional if the UK is to be ready to make the most of post-Brexit opportunities.

The EEF is also calling on the government to encourage innovation by improving the current research and development tax credit scheme. Other reforms the EEF are keen to see include further investment into digital infrastructure, and improved training. Similar calls have been made from business organisations like the CBI, who feel that more should be done to improve technical training and apprenticeships in the UK.

Government efforts to improve business productivity

The chancellor’s autumn budget had already allocated significant funding for productivity, with the announcement of a $23 billion National Investment Productivity Fund; the fund aims to improve infrastructure, research and development and assist in the building of faster internet connections.

The government has also announced an industrial strategy. The strategy, which was recently outlined in a green paper, has increasing economic growth and making companies more productive at its core. However, it has come under criticism from various quarters for lacking details and targets.

Lack of productivity in manufacturing

Throughout the past year there has been several reports regarding the fall in productivity in the manufacturing sector. Some of this has been attributed to poor internet connectivity among some manufacturers, while the EEF has highlighted how productivity in some industries has come under strain due to the reduction in crude oil prices. In addition, the financial crisis took its toll on manufacturing productivity, which had previously been gaining strength.

There has been calls for government action to improve productivity, some of which were addressed by the announcement of the industrial strategy. However, the government is still be urged to adopt policies that will further encourage innovation and investment into new technology to boost productivity among the manufacturing sector.

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