According to Daniel Skyte, an analyst at the Centre for Economics and Business Research, growth in the sector’s output has not been reflected in new job numbers. Skyte says that although manufacturing has shown “resolute growth” in recent months, with output and new orders reaching their highest growth points since 1994, along with increases in exports to the USA, China and the Eurozone, this was not reflected in the employment index.
Although this measure maintained some growth, it was at a slower rate, as companies looked to maximise the output of existing staff. He continued: “As noted by the Governor of the Bank of England, UK employee productivity is no higher than in 2005, so firms have plenty of scope to increase output by making existing employees more productive as opposed to hiring new workers. This could serve to keep unemployment elevated even as the economy recovers – so market expectations that interest rates will rise before 2016 may be unwarranted.”