Rebalancing of UK economy begins

Manufacturing companies can often benefit from invoice finance facilities, to help stabilise cashflow and remove cashflow gaps

The UK economy has begun to rebalance itself towards manufacturing, according to new data.

Figures from IHS Global Insight have indicated that manufacturing output made up 12.5% of gross domestic product (GDP) in 2011, compared to 12.2% and 11.6% in 2010 and 2009 respectively.

This is against the general trends of the past 50 years, which has seen factory output shrink as a proportion of the wider UK economy.

Manufacturing last saw such a rebalancing, albeit short-lived, in the years 1993-95.

This news will be welcomed by the government as it looks to steer the economy away from an over-reliance on the services industry, which makes up more than three-quarters of the economy currently.

The improved performance in the manufacturing industry has been partly put down to increased productivity and efficiency, as staff culls have led to increased output per worker.

Large investment in global car manufacturing firms across the UK was also said to have given the wider manufacturing industry a more competitive edge, such as providing orders for smaller metal manufacturers.