BRIEFING PAPER Number 05809, 18 August 2016 Manufacturing: international comparisons By Chris Rhodes Inside: 1. Manufacturing output 2. Manufacturing output per head 3. Manufacturing output as % of national economic output 4. UK manufacturing output: historic rankings 5. Manufacturing output: international comparisons since 1970 6. Note on sources www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary Number 05809, 18 August 2016 Contents Summary 3 1. Manufacturing output 4 2. Manufacturing output per head 5 3. Manufacturing output as % of national economic output 6 4. UK manufacturing output: historic rankings 7 5. Manufacturing output: international comparisons since 1970 8 6. Note on sources 9 Cover page image copyright: Cheese factory by James Yu. Licensed under CC BY 2.0 / image cropped. 2 3 Manufacturing: international comparisons Summary This note uses UN Conference on Trade and Development (UNCTAD) data to compare manufacturing in different countries. The most recent data from this source are for 2014. Manufacturing output in 2014: • For the first time in the UN data, Chinese manufacturing output was the highest in the world, $1.9 trillion. • USA manufacturing output totalled $1.8 trillion, the second highest in the world. • The UK’s manufacturing output was $247 billion, the 9th highest in the world. Manufacturing output per head: • In Switzerland, manufacturing output per head was $11,600 in 2014, the highest in the world by a considerable margin. • In the UK, manufacturing output per head was $3,800, but note that the population and total manufacturing output in the UK is far larger than in Switzerland. Manufacturing as a proportion of national economic output in 2014: • Small, developing economies that are highly reliant on their manufacturing sector have the highest manufacturing output as a proportion of total economic output. • For example, Turkmenistan has the highest proportion of output from manufacturing at 38%. The tiny island nation of Nauru’s manufacturing output totals 37% of total output. • In the UK, the manufacturing sector accounted for 11% of output. UK manufacturing ranking: • The UK has fallen down the world rank of manufacturing nations in the last decade. Having been the 5th or 6th biggest manufacturer in terms of total output between 1970 and 2004, the UK is now 9th. • The USA was the world’s largest manufacturer between 1970 and 2013. It is now the second biggest, having been overtaken by China in 2014. Number 05809, 18 August 2016 1. Manufacturing output Manufacturing output in 2014 $US in 2005 prices using 2005 exchange rates Rank in world China United States Japan Germany South Korea India France Italy United Kingdom Taiwan Mexico Canada Brazil Russia Spain Turkey Indonesia Switzerland Poland Netherlands 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Manufacturing output $ billions 1,882 1,843 1,001 680 369 290 267 257 247 190 170 150 145 140 134 120 110 95 94 87 Per head, $ % of national output % of world manufacturing 1,400 5,700 7,900 8,400 7,400 200 4,000 4,300 3,800 8,100 1,400 4,200 700 1,000 2,900 1,600 400 11,600 2,400 5,200 28% 12% 19% 23% 30% 17% 11% 15% 11% 30% 18% 11% 11% 15% 13% 18% 22% 19% 19% 12% 19% 19% 10% 7% 4% 3% 3% 3% 3% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% Source: UN Conference on Trade and Development (UNCTAD) Rank out of 237 countries World average is the unweighted mean of all countries in the world. This measure is used throughout this note. UK manufacturing output totalled $247 billion in 2014. This was below manufacturing output in the other major European economies: France, Italy and Germany. The UK accounted for 3% of the world manufacturing output. Between them, the US, China, Japan and Germany accounted for 55% of world manufacturing output. Manufacturing output, $ billions, 2014 top ten, 2005 prices using 2005 exchange rates 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 The manufacturing output of the countries featured in the table above accounted for 84% of world manufacturing output in 2014. 4 5 Manufacturing: international comparisons 2. Manufacturing output per head Manufacturing output per head, $s 2014 top ten, 2005 prices using 2005 exchange rates 12,000 10,000 8,000 6,000 4,000 2,000 0 Per head, manufacturing output in the UK was $3,800 in 2014, below many advanced economies, such as Germany ($8,400), Japan ($7,900), and the US ($5,700). Some of the countries featured in the chart above have relatively low total manufacturing output, such as Switzerland ($95.3 billion) and Qatar ($10.5 billion), but also small populations meaning that manufacturing output per head is high. Countries such as the US or China, have huge manufacturing output (around $1.8 trillion each) but also large populations, so manufacturing output per head is lower than in many countries: $5,700 in the US and $1,400 in China. Number 05809, 18 August 2016 3. Manufacturing output as % of national economic output Manufacturing output as a % of national output 2014 top ten, 2005 prices using 2005 exchange rates 40% 35% 30% 25% 20% 15% 10% 5% 0% Manufacturing as a proportion of UK national economic output was 11% in 2014. Many countries in which manufacturing accounts for a high proportion of economic output are developing countries with relatively low total economic output. Turkmenistan, where manufacturing accounted for 38% of economic output in 2014, has a small economy by Western standards, with total economic output a fraction of the UK’s. 6 7 Manufacturing: international comparisons 4. UK manufacturing output: historic rankings UK rankings for manufacturing output Out of 237 countries, 1=highest Manufacturing output 0 20 Per head 40 60 80 100 % of national output 120 1970 1975 1980 1985 1990 1995 2000 2005 2010 Between 1970 and 2004, the UK was ranked 5th or 6th in the world in terms of total manufacturing output. Since then the UK has fallen down the international rankings for manufacturing output and was 9th in 2014. In terms of manufacturing output per head, the UK was ranked 18th in the world in 1970, and 29th in 2014. In terms of manufacturing as a proportion of national economic output, the UK has fallen from 20th in the world in 1970 to 116th in the world in 2014. This is a product of the growth of manufacturing bases in other parts of the world, and the diversification of the UK economy, with the service industries contributing a far larger proportion now than in 1970. Number 05809, 18 August 2016 8 5. Manufacturing output: international comparisons since 1970 International comparisons of manufacturing output: 1970, 1980, 1990, 2000, 2010 and 2014; top 20 countries in 2014 $US in 2005 prices using 2005 exchange rates 1970 China United States Japan Germany South Korea India France Italy United Kingdom Taiwan Mexico Canada Brazil Russia Spain Turkey Indonesia Switzerland Poland Netherlands 696 306 368 5 19 122 112 177 7 38 62 38 58 13 45 10 37 Manufacturing output ($ billions) 1980 1990 2000 2010 828 472 440 22 28 166 204 201 25 75 87 92 92 22 52 16 45 1,062 754 519 70 57 191 254 243 50 92 110 95 114 43 60 12 59 Source: UN Conference on Trade and Development (UNCTAD) Rank out of 237 countries World average is the unweighted mean of all countries in the world. - indicates data not available 1,567 825 550 167 101 245 289 264 82 143 165 113 90 149 66 68 38 79 1,373 1,778 996 616 314 226 258 269 243 159 149 137 146 125 149 100 90 86 78 84 2014 1970 1,882 1,843 1,001 680 369 290 267 257 247 190 170 150 145 140 134 120 110 95 94 87 1 4 2 42 21 6 7 5 34 14 9 13 10 26 11 28 15 Manufacturing output (Rank out of 237) 1980 1990 2000 2010 1 2 3 27 23 7 5 6 24 12 11 9 10 28 14 31 15 1 2 3 12 16 7 4 5 17 11 9 10 8 19 13 42 15 1 2 3 7 12 6 4 5 14 10 8 11 13 9 18 17 24 15 2 1 3 4 5 9 7 6 8 10 12 14 13 15 11 16 17 18 20 19 2014 1970 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 24% 34% 34% 18% 16% 22% 26% 27% 35% 19% 22% 27% 25% 21% 23% 31% 25% Manufacturing output as a % of national output 1980 1990 2000 2010 21% 27% 29% 23% 19% 20% 27% 21% 42% 19% 19% 31% 23% 22% 24% 31% 18% 18% 26% 28% 27% 20% 18% 22% 19% 36% 20% 17% 26% 20% 29% 21% 31% 18% 15% 21% 23% 29% 19% 16% 20% 16% 28% 20% 19% 16% 22% 18% 21% 19% 18% 15% 32% 12% 20% 22% 31% 18% 11% 16% 10% 30% 17% 11% 15% 15% 13% 17% 23% 19% 18% 12% 2014 28% 12% 19% 23% 30% 17% 11% 15% 11% 30% 18% 11% 11% 15% 13% 18% 22% 19% 19% 12% 9 Manufacturing: international comparisons 6. Note on sources Similar data to those used in this note are also available from other sources, such as the World Bank and the OECD. Due to methodological and definitional differences, different sources should not be directly compared. The figures in this note are in US dollars, converted from national currencies using 2005 exchange rates. The figures are in 2005 prices. This means that price inflation and fluctuations in the strength of local currencies are not reflected in the data in this note. Manufacturing is defined using the International Standard Industrial Classification of all Economic Activities (ISIC), revision 3.1, Section D. Some slight local variations in the definition of manufacturing mean that comparisons should be made with caution. The measure of economic output used here is Gross Value Added, which measures total economic output of part of the economy, minus any costs incurred in production. Data is missing for some countries for a number of different reasons, including the fact that the country may not have existed in its current form in the past, or that it did not have a fully functioning statistical agency until more recently. About the Library The House of Commons Library research service provides MPs and their staff with the impartial briefing and evidence base they need to do their work in scrutinising Government, proposing legislation, and supporting constituents. As well as providing MPs with a confidential service we publish open briefing papers, which are available on the Parliament website. Every effort is made to ensure that the information contained in these publically available research briefings is correct at the time of publication. Readers should be aware however that briefings are not necessarily updated or otherwise amended to reflect subsequent changes. If you have any comments on our briefings please email [email protected]. 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