Government manufacturing statistics- (25.01.02)

The UK government was accused this week of trying to hide the slump in manufacturing industry by reviewing the classification of what is industrial to include growth areas such as software, for instance. The figures released showed a year-on -year output decline of 5.4%. The argument from the government was that the output slump is exaggerated due to outsourcing activities and that this "industrial services" category should be included in manufacturing.

Whilst the arguments against this, including taking the UK outside the international standard classification, will probably mean that this proposal goes no further there is some need for a wider review. The definition of what is manufacturing already contains anomalies includes lumping extraction industries in with chemicals, for instance. It would make more sense to reclassify all types of output in terms of the value added and the nature of the resource used to create the product. This would allow new sections for the knowledge economy (where the input is brain power) as distinct from dot coms that are basically retail outlets. This would produce more meaningful statistics that no government could logically shuffle sectors around to mask economic problems even if it wanted to.