While the recession has impacted on all areas of the economy, manufacturing and
particularly that part of manufacturing dependent on exports, has been especially
hard hit. In the year to the second quarter of 2009, manufacturing output fell by
12.5% in real terms with only the construction industry suffering a deeper contraction.
As a result it has been those regions which are relatively more dependent on manufacturing
which have seen the biggest increases in unemployment. Of the ten regions with a
location quotient for manufacturing greater than 1.0, seven experienced an above
average increase in the number of unemployed.
The West Midlands, for instance, experienced a 71% increase in unemployment in the
year to Q2 2009 with both Scotland and the South West both recording a rise of more
than 65% and Wales and Northern Ireland over 50%.
Of the three other regions with a location quotient for manufacturing of more than
1.0, it seems likely that the North West and the North East were protected to a
certain extent by the size of their government-financed services sector.
