UK manufacturing is `in a downward spiral`

"Manufacturing is haemorrhaging out of the UK at an alarming rate," the new Engineering and Machinery Alliance (EAMA) is warning. "It is in a downward spiral which needs arresting and turning round with new and dramatic government initiatives. The question is: does the government have the will to act in a radical way?"

In a statement following its first official meeting, EAMA - a lobby group set up to represent the views of eight trade associations covering the manufacturing and engineering sector - complains that the Government has shown "a total disinterest in the future of manufacturing in the UK".

It adds that the Chancellor`s recent optimistic forecast for the growth of the UK economy "shows complacency about the underlying consequences of a two-tier economy, which is driven by consumer expenditure". The forecast "lacks any recognition that it is through manufacturing that you gain true wealth creation," EAMA says.

Manufacturing has been in recession for almost a year and has shown extremely weak growth for the past decade, the Association reports. "Years of under-investment … have left it ill-equipped to cope with the current global recession," the statement continues. "As a consequence, our productivity is far below the US and our European counterparts, and we cannot compete on equal terms."

"What we urgently need is for the Government to make a long-term investment in supporting manufacturing at this critical time," says EAMA chairman, Mike Legg. "We are not looking for subsidies for lame-duck industries; we need the Government to recognise the importance of manufacturing to the economy … and to do something substantial to boost confidence and encourage investment. That is the only way to improve productivity and competitiveness."

EAMA represents the interests of more than 4,000 companies, employing more than 400,000 people and generating sales worth over £20bn.