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.
Comments
The more rapid decline after 1997 is interesting, and I would wonder whether it's down to increased outsourcing to Europe by companies that were attracted to Wales by successive Tory and Labour inward investment strategies. This is made easier by large trading blocs like the EU, and NAFTA in North America, where you have the infamous "maquiladoras" on the Mexican side of the border.
And what has replaced these good jobs? Certainly in the Swansea area most of the well-paid manufacturing jobs have been replaced by low-wage service-sector jobs. People have made up the shortfall in income by getting into debt.
There's a lot of talk about Deflation at the moment, but I'd argue that in a number of important respects, we've had deflation - including wage deflation - for years. Although we have a minimum wage, companies have found a way round it via. outsourcing. The net effect is downward pressure on wages.
Labour tacitly understands this, which is why they brought in the minimum wage - to place a floor under declining wage levels as more and more companies outsource.
Those political reasons being that they were manufacturing things no-one wanted, badly, at prices no-one wanted to pay.
Can you give us a link?
However, I would suspect that the decline in Welsh manufacturing jobs and the relative share of manufacturing in our GVA (and probably the agriculture figures too) is a reflection of what's happened in the UK as a whole.
It would be interesting to know how the Welsh decline compares with the rest of the UK. It may well be (I might even put 10p on it) that manufacturing decline is proportionately less in Wales than it has been in the RUK.
"'although it is certainly true that Thatcher did wipe out a large chunk of Wales' manufacturing base - mainly for political reasons.'
Those political reasons being that they were manufacturing things no-one wanted, badly, at prices no-one wanted to pay."
Well I kinda had Coal in mind - you know, the stuff they're all talking about again because the incompetent UK government squandered our gas reserves...
figures out today prove the opposite
What figures? Please provide a link. Although in your case I would also ask you to clarify what you mean by opposite. Opposite to what?
I'm particularly disappointed that DJE hasn't backed up what he said, because he's shown us that he's quite capable of doing hyperlinks.
here is the link to the GVA data from the national statistics website
http://www.statistics.gov.uk/downloads/theme_economy/PROGRESS_NUTS1.xls
you can examine the industry data from this.
As you haven't provided a source for jobs, I won't comment on that. But the GVA figures for manufacturing bear out exactly what I suspected. These are the figures for manufacturing as a percentage of GVA:
Wales: 1997 = 7974/28760 = 27.72% ... 2006 = 7545/42193 = 17.88%
England: 1997 = 120700/618187 = 19.52% ... 2006 = 128499/985477 = 13.04%
Scotland: 1997 = 13047/61483 = 21.22% ... 2006 = 12992/93361 = 13.92%
NI: 1997 = 3333/16476 = 20.23% ... 2006 = 4119/26787 = 15.38%
UK: 1997 = 150247/724906 = 20.72% ... 2006 = 153155/1147819 = 13.34%
Much the same is true for agriculture, although this is a much smaller sector.
Wales: 1997 = 487/28760 = 1.69% ... 2006 = 312/42193 = 0.74%
UK: 1997 = 10009/724906 = 1.38% ... 2006 = 7869/1147819 = 0.69%
Your intention seems to have been to try and make out that Wales was doing particularly badly, and that the Welsh Government could have done more to reverse it. That was just blatant party political spin.
Wales' manufacturing base was and still is proportionately much stronger than in the RUK. Also, if we take the statistically dodgy path of taking percentages of percentages, the relative decline of manufacturing as a percentage of GVA has been 35.62% in the UK, but in Wales has been 35.49% ... a very rough illustration that the decline in Wales has mirrored what has happened in the UK as a whole. If anything, we've done very slightly better than the RUK.
Now of course nobody is going to deny that it would be good to reverse this decline and aim for a more vibrant manufacturing sector. But since the proportion of manufacturing is in decline in the whole UK, it would surely be fairer and more relevant to aim your criticism for that decline much more at Westminster than the Assembly.
I will not question that the WDA was successful in drawing inward investment and jobs to Wales. But many of those companies simply pulled out when the initial grants and loans ran out, and the jobs they brought disappeared with them. I certainly won't decry the efforts of the people concerned, but it was a short term blip rather than a long term solution. Surely the big question to ask is why that happened.
My answer is that Wales has its hands on relatively few economic levers that could influence the manufacturing sector, or any other wealth producing part of our economy. Just like the WDA before it, the Welsh Government can give money in the form of grants and loans to certain businesses (usually to help them set up) and it has a say in setting business rates. It's like expecting a car to work simply because it has a starter motor. You can't travel any distance with just a starter motor.
The things that would REALLY make a LONG TERM difference to the economy as a whole, such as being able to vary rates of business taxation or setting a minimum wage still belong exclusively to Westminster. The Welsh Government can only tinker at the edges with no power to influence the general economic climate of Wales ... without that power we cannot redress the long term effects of policies from both Labour and the Tories that have (in my view inevitably) resulted in ever more over-centralization.
I hadn't sought to make a party political point on behalf of Plaid ... my argument was about Wales, and what we in Wales can do together to improve our economic performance. To that end I will happily work with reasonable people from other parties to try and improve Wales, and I'm sure that I'll have a more positive discussion of these issues with the likes of DJE than with the likes of the author of the last two posts.
Plaid were not able to implement those commitments because we did not have a large enough number of AMs to form a government on our own. But if the concept of lower business taxes across the board - rather than being restricted only to limited spending on business development without being able to affect the overall economic climate in Wales - appeals to anyone else reading this, they can vote accordingly.