ABSTRACT
The decline in the GDP share of manufacturing has in recent years been debated at great length by economic commentators. However, anyone trying to follow the debate may be forgiven for being confused. Some commentators take the view that the decline in manufacturing typifies all that is wrong with the British economy. Others imply that there is something inevitable and possibly even progressive about a declining share of manufacturing in GDP. The complexity of the issues involved owes much to the fact that the situation facing UK manufacturing industry is the product both of secular trends and the build-up of North Sea oil production since the late 1970s. The recent fall in world oil prices has merely served to focus more attention on what the effects of a fall in the real value of North Sea oil production might be. This paper looks at the decline in the share of manufacturing in UK GDP since the early 1960s and tries to set this decline in the context of what has happened in other countries. It then uses this comparison as a basis for discussing the reasons why the shift away from manufacturing may have occurred.
