The decline of Welsh Manufacturing

Yesterday, I published some new figures on the decline of manufacturing in Wales during the last eleven years of a Labour Government, which showed that the sector contracted by over five per cent between 1997 and 2006, the last year for which figures are available.

In contrast (and surprisingly for some), under the last Conservative government, the sector grew by 31 per cent between 1989 and 1997.

The research also reveals that:

  • 57,400 manufacturing jobs have been lost in Wales since 1997, at a time of a massive increase in the number of employees in the public sector.
  • Manufacturing in Wales was responsible for 28 per cent of GVA (the index which tracks prosperity levels) in 1997 but had fallen to 18 per cent by 2006, the same as business services
  • Key sectors such as hotels and restaurants, so vital to the tourism industry, have also stalled under Labour. During the period 1989-1997, this sector grew by 82 per cent but only by 50 per cent for the period 1997-2006 and their overall contribution to the Welsh economy has remained the same since 1997.
  • The utilities sector in Wales has also declined under Labour. During the period 1989-1997, electricity gas and water supply grew by 32.3 per cent but have declined by 5.6 per cent since 1997.
  • Agriculture has also slumped by 36 per cent during the period 1997-2006, following a small decline during the period 1989-1997.

After much rhetoric, these figures highlight in the starkest possible terms the decline of manufacturing in Wales over the last decade.

I am sure that the usual suspects will hark back to the 1980s and blame the Conservatives for the decline of Welsh manufacturing. However it was during the 1980s and early 1990s that the manufacturing industry, supported by the WDA, encouraged a range of successful inward investments and the establishment of a strong indigenous supply chain to become the envy of other UK regions.

Despite billions of pounds of additional funding for the Welsh business sector being made available from the Treasury and Europe since 1997, the manufacturing sector has received little proper support from governments in London or Cardiff during the last decade.

The warning signs have been there for years - it's just that politicians have conveniently chosen to ignore them.

If Wales is to emerge from the current recession, then the Assembly Government needs to reverse this decline and provide more support for research and development, skills and new process technologies within our manufacturing industry.

If a world-class economy is to be created in Wales, then increased support must be provided to tackle the productivity gap with our global competitors and ensure a high technology, high skills manufacturing industry in Wales.

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