The Analysis of the Manufacturing Industry in the United Kingdom - Coursework Example

UK manufacturing activity Introduction Early this year, the manufacturing industry in the UK showed signs of improvement despite decreased export orders according to monthly surveys. Subsequently the job market also experienced a relatively high making the levels stabilize for the benefit of the economy. Prior to this occurrence, factories in the manufacturing sector operated on existing order backlogs in the month of January 2013. In essence, the poor European zone economy affected the export offers for UK manufacturers since the zone serves as their biggest export destination. According to a survey of Purchasing and Supplies Chartered institute at least six hundred industry institutions experienced a flop in the export market in a sequence of at least one year (BBC, 2013). However, this predicament did not hinder potential growth in the domestic demand market where orders for locally manufactured products reached an all time high. Therefore, the improvement in business trading conditions has facilitated a remarkable correspondence to an encouraging start in 2013 for the manufacturing industry (BBC, 2013). In this regard, this essay will delve on the ways in which the UK can command a global market share as compared to other competitors like China. Further, it will focus on how low cost labor influences this trend as the application of low cost labor force has propelled China into being a manufacturing giant. In addition, the essay will zone in which precision products the UK should focus on as how Germany has done. Presentation of issues In the past years, the poor performance of the manufacturing industry had clear indications through the financial markets where they recorded dismal performances. Sequentially, this performance led to the stagnation of industrialization in the UK. However, this trend has experienced a revolution in that the sector has managed to lift the economic aspects of the UK. This means that the export markets for the manufacturing industry in the country have expanded with most of the expansion being in January of 2013. In addition, the European market has also achieved stabilization through the emergence of improved market activities. Moreover, the weakening of the sterling pound has also facilitated the expansion of the European market because this has helped overseas markets to enhance trading (Abbott, 2002:120). Therefore, the most likely occurrence this year is the securing of growth levels for product launches by manufacturers in UK. Subsequently, the new product launches into the European market would push for profitable markets outside Europe. In essence, all is positive acquisitions occurred in a period in January 2013, which marked as a positive way of beginning the year for the industry. Presently, the re-emergence of the manufacturing sector has set their goals on being on the worldwide recovery path. Key themes Ideally, the global recession formed the basis for lack of employment for a large part of the UK population (World Of Information, 2003: 394). This predicament influenced a high in the inflation rates because the products on sale came with a high price tag on them. In essence, the recession forced many to lose their posts in their places of work because the profits realized during this time was not sufficient enough to sustain the labor force. During this time, there was the unending search for labor available options because the demand was high, but there was no labor force sufficient to make production in the manufacturing industry. Arguably, global recession brought about the disparity in the industry because the manufacturers were not able to reach market demands. In addition, the lending rates went up because of inflation as the sterling weakened to relatively low levels. Therefore, the manufacturing industry had to borrow at extremely high lending rates, which they could not manage to repay since their profit levels were insufficient. In this regard, the manufacturing industry could not borrow or increase on their asset base because they could not afford to borrow. However, the manufacturing industry in China suffered the same fate as that of the UK, but they managed to turn around their luck for the better (Great Britain, 2010: 57). Their industry suffered high commodity prices and a potential collapse of this principal economy. As a drastic measure, China re-enforced a new economic stimulus to enhance the global demand for products from China. This happened despite the bottle necked financial and credit conditions experienced in the country during the recession period. In essence, the incorporation of the stimulus economic approach was effective for the manufacturing sector in China because they were able to increase their output (Qingyuan, 2011:240). Labor market in China and the UK According to the labor statistics provided by the UK National statistics, the labor market provides an insight into the performance of the economy. The statistics provided touch on the participation of people in ensuring that their liberal input has an effect. On the other hand, the labor market in China in 2012 showed that a large part of university graduates did not find their desired employment openings hence had to venture into the manufacturing industry. In the UK, the labor market is divisive in that there is the economically active and the inactive labor forces. The former describes the employed and the unemployed parts while the latter describes the the unemployed fractional part who do not qualify under the ILO requirements. However, the world considers China to be the leading country in terms of affordable labor options. This means that China offers employment to all persons willing to join the labor market without necessarily factoring much on their education credentials (Blossfeld, 2008: 13). In essence, China focuses on developing skills relevant to their various industries that include the product manufacture industry, subsequently, this has helped China in the development of products that meet international needs and standards. On the contrary, UK and other European nations focus on producing quality products that come with high price tags on them hence inhibiting their sales (Kahanec & Zimmermann, 2009:64). For instance, China has focused on the production of products that the market would want without having any price restrictions. This means that these products are cheap and do not last long on the shelves as compared to products from other European countries. Additionally, the China labor force manufactures products that are effective in the market without factoring expensive labor. With this in mind, the UK should also venture in the acquisition of affordable labor within the work force as a way of promoting local product manufacture. In addition, the projections for the labor market in the UK are looking up because the country has appreciated the need to domesticate labor rather than import it from other countries. This would facilitate competition in the manufacturing labor market as a way of producing competent employees to run industries effectively. Further afield, the manufacturing industry should also strive to incorporate skills into their education system the same as China has done. In essence, having a skilled labor force rather than a learned labor force provides an avenue for increased innovation and creativity. Additionally, the creativity levels portrayed in the manufacturing industry may serve as prime milestones in the accomplishment of desired market outcomes because of the presentation of unique products for sale. Precision products for manufacturing industry Arguably, the manufacturing industry in Germany decided to concert their efforts in the production of specified products as a way of improving their export to the international market. Essentially, Germany focused on the manufacture of car engines that have made the country have a predominant share in the international market. In addition, Germany plays host to a number of internationally recognized cart brands that include Porsche, Mercedes, and BMW. Therefore, Germany has reaped tremendous from focusing on the car manufacture and engine production industry. On the other hand, the UK manufacturing industry seems to have borrowed a leaf from this country as they have also ventured in precision products (Great Britain, 2007: 191). For instance, the UK has now shifted their focus in the production of steel tools and other products applicable in the industrial sector. Further, the industry now designs and produces molding machines and electrodes that have the potential of sale in both local and international markets. In essence, the production of precision products allows a country to command their relevant market because they are able to narrow down on their competition. Therefore, the manufacturing industry in the UK should increase their efforts in making these steel products to perfection as a way of edging out the competition. Additionally, focusing on precision products will help the UK in producing quality products that are able to compete effectively with other products from other countries like China. For instance, China does not have a specified line of production because they produce products that they sell across all markets. This means that their products may sell at a knock off prices since they do not meet set quality standards . On the contrary, if the country was to be precise in manufacturing then chances are that the quality of their products would improve. Subsequently, the UK should use precision product if the country intends to attain more profits and increase their global market presence. Objectively, the stabilization of the European market serves as an indicator that the Eurozone can now accommodate exports from the UK. This means that the country has intense chances of exporting their precision products into this zone (Carbaugh, 2011: 291). Lessons learnt The edging up of the manufacturing industry in the UK attributed to several factors that vary from labor costs and labor force with the use of precision products. In essence, the manufacturing industry in China has a significant difference from that of the UK because of certain factors. For one, the opportunities offered by the UK are expensive as compared that available in China. Therefore, the UK strives to balance the labor market by accommodating their local population rather than export labor. In essence, labor exportation tends to overlook the locally available labor options to enhance competitiveness for prosperity. Additionally, the manufacturing industry in the UK would be able to challenge the social and industrial conflict that might have arisen. However, regulations set by the European trading zones may work for or against this labor market because they may have an impact on decision making processes for these companies. This means that the policy frameworks may hinder manufacturing industry from realizing their ultimate potential. On the other hand, the weakening of the common trading currency within the EU trading block may also assist this industry to edge towards a relative economic high. Moreover, precision products may also have significance in raising this trend because it may help in establishing the global market share presence for these products. This is visible in economies like Germany who have realized profits and market stability. However, the UK and the manufacturing industry managed to edge higher despite a fall in export orders to European zone. In addition, intense labor competition presented by China made it hard for the UK to stabilize their market, but their re-emergence was remarkable. Conclusion The edging of the manufacturing industry in January 2013 gives hope to the industry by portraying that results are achievable through change of tact. This means that the past performances by the sector towards their contribution to the economy of the UK. However, the progress realized so far draws relevance from China which is a global stable economy. In addition, labor costs available for the labor market in the UK are high as compared to that of China making their labor provisions inaccessible. Subsequently, the emphasis should be on making the labor network permeable for the manufacturing industry make more progress (Great Britain, 2007: 5). Lastly, the Eurozone has also opened up export orders for the industry that had stalled because of inflation and the global recession. Therefore, this trend may continue all through the year because the odds seem to be in favor of the UK manufacturing industry. Bibliography Abbott, L. F. 2002. British withdrawal from the European Union: a guide to the case for. Manchester, Industrial Systems Research. BBC Business News. 2013. UK manufacturing activity edges higher in January. Available from http://www.bbc.co.uk/news/business-21291974 [Accessed March 5, 2013] Blossfeld, H.-P. 2008. Young workers, globalization and the labor market: comparing early working life in eleven countries. Cheltenham, Glos, UK, Edward Elgar. Carbaugh, R. J. 2011. International economics. Mason, OH, South-Western Cengage Learning. Great Britain. 2007. Future of UK manufacturing: oral and written evidence. London, Stationery Office. Great Britain. 2007. The future of UK manufacturing: public procurement : report, together with formal minutes, oral and written evidence. London, TSO. Great Britain. 2010. Exporting out of recession: third report of session 2009-10. Vol. II, Oral and written evidence. London, Stationery Office. Kahanec, M., & Zimmermann, K. F. 2010. EU labor markets after post-enlargement migration. Heidelberg, Springer Verlag. Qingyuan, Z. 2011. Applied Economics, Business and Development International Symposium, Isaebd 2011, Dalian, China, August 6-7, 2011, Proceedings. Springer-Verlag New York Inc World Of Information (FIRM). 2003 Europe review. [Saffron Walden, Essex, England], World of Information. Read More