Concentrate on manufacturing, urges Deloitte.
Consultancy company Deloitte has singled out manufacturing as the industry to lead the UK out of recession, despite a difficult opening few months of 2009 for the sector.
The firm predicted in its latest Economic Review that manufacturing’s contribution to the economy could rise from 11% to 13% while it thinks financial services could fall from 8% to 5%.
Factors like a weakened pound and low confidence in financial industries has primed manufacturing for resurgence, Deloitte said.
The British economy will however take some time to begin growing again, Deloitte warned, refuting Chancellor Alistair Darling’s claim that the UK would see 1.25% growth next year. Instead, the economy will decline by 1% in 2010 before returning to growth in 2011, says the report.
“Although concerns have been voiced about whether the UK’s manufacturing sector has shrunk too much, we see no reason why it cannot experience a mini-revival,” said the report. “The drop in the pound should help the UK to play to its traditional exporting strengths, such as the production of pharmaceuticals and aircraft.”