US productivity: still on top

Whichever set of figures you care to look at they all point to one thing – US manufacturing has undergone an impressive increase in output during the 1990s which has not been matched in the UK. Gordon Richards, economist at the US National Association of Manufacturers, says: `There is still talk about manufacturing being in […]

Whichever set of figures you care to look at they all point to one thing – US manufacturing has undergone an impressive increase in output during the 1990s which has not been matched in the UK.

Gordon Richards, economist at the US National Association of Manufacturers, says: `There is still talk about manufacturing being in decline, but if you look at the figures, it’s obvious that what has really happened is that we have undergone an industrial revival.’

According to the International Monetary Fund, industrial production in the US rose by 38% in the 10 years to 1999, while in the UK it rose by just 9%. Most of UK industry’s expansion in the 1990s took place between 1993 and 1995, the recovery period which followed the recession of 1990-91. By contrast, US manufacturers maintained that recovery momentum into the second half of the decade. Figures from the Organisation for Economic Cooperation and Development show that US output rose by 20% between 1995 and 1999, whereas in the UK it increased by just 1%.

US productivity has also risen. According to the Institute for Manufacturing, productivity grew by an average of 3.6% per year between 1990 and 1998, compared to 2.7% in the 1960s and 1970s, and has outstripped the economy generally, rising by 4.8% and 6% in 1998 and 1999 respectively, compared to 2.8% and 3% in the rest of the economy.

Rising productivity often means lower employment levels, but it is in the UK rather than in the US that jobs in manufacturing have disappeared. In the US, paid employment in manufacturing rose from 18m in 1993 to 18.4m in 1999. As a result, unemployment in the US was 4.2% last year – compared to 6.1% in the UK and 9.2% in the EU.

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