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New Communist Party of Britain |
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New Communist Party of Britain |
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New Communist Party of Britain |
adopted December 2015
Since the onset of the 2007 financial crisis productivity in Britain has been exceptionally weak. Before 2008 output per worker grew at a steady annual rate of about 1.75 per cent a year. Since the crisis, it has stalled with manufacturing and construction still 8 and 10 per cent below the level seen in 2008. The factors causing this are reduced investment in capital, keeping hold of inefficient equipment that requires more maintenance and downtime or under‑employment where firms are unable or unwilling to dispose of capital or lay off workers because of minimum staffing levels required to keep the business going. If mergers and acquisitions continue apace without more investment in capital, productivity “will improve” but at the expense of workers jobs and pay.
In some localised areas of manufacturing such as car production increased productivity has gone against the trend but this has been at the expense of jobs and wages. Some factories are now starting to become “competitive” with similar factories across the world. Nissan decided, in March 2012, to invest £125 million to build a new small hatchback in Sunderland instead of in India.
Like all manufacturing the car industry has always suffered from periods of over‑production; in 2007 just prior to the crisis there was feverish expansion in car production with about 1.6 million units built, by 2009 production had fallen to 1.1 million, then it rose to 1.5 million units by 2013. At the beginning of 2014 the optimism for the car industry didn't materialise as production dropped back to about 1.3 million by the end of that year. As about 40% of units are currently exported to the European Union, and with the euro‑zone in crisis, it is not expected that production for the European market will increase any time soon.
On the retail side, overall growth in car sales was 9.4 per cent last year, which with 2.48 million new vehicles sold was the best year since 2004. This was fuelled by easy credit schemes such as Personal Contract Purchase (PCP), one‑off boosts such as payment protection insurance pay‑outs and reliant on large discounting by the manufacturers. So all and all it would appear that the car industry has learnt nothing about the long term prospects of credit driven consumer booms.
With the introduction of just‑in‑time methods, increased computerisation and automation, fewer and fewer workers are required to produce the same volume of goods than before. For the Nissan plant in Sunderland to build 100,000 small hatchbacks requires only 400 workers, with another 1,600 elsewhere. The tendency of increasing productivity, without a corresponding increase in wages or the creation of new jobs elsewhere, is to increase the volatility, frequency and length of repeating periods of over‑production and recessions. As recent history shows these recessions can blend into something deeper.