Business Economics Essay Example | Topics and Well Written Essays - 2500 words - 6

Business Economics - Essay Example Britain’s main manufactured export products are fuels, chemicals, food and beverages, tobacco, and aerospace products among others. According to the Organisation for Economic Co-operation and Development (OECD) Britain’s purchasing power parities (PPPs) has declined tremendously for the last few years (OECD, 2007). Accordingly Yahoo! Finance quoting UK’s Office for National Statistics (ONS), asserts the economy has shrunk by 0.3 percent within the year, much lower than that of Unite Sates and the regional European average (Yahoo! Finance, 2009) [Figure:1]. However the weak Sterling-pound has nonetheless seen a rebounding of the manufacturing sector as exports grew cheaper yet analysts predict a depressed future as Britain’s GDP fell to 2.9 percent by November 2009 which was the heaviest since July 1985s 4.0 percent turndown when UK’s manufacturing sector was heavily deindustrialization (ONS, 2009). Davis (2002) attributes this deindustrialisation to the prevalent lethargy in growth, escalating labour costs, out-sourcing production to lower labour cost centres, globalisation and the impact of imports infiltration. According to Office for National Statistics (ONS) data, the manufacturing industry accounted for just 16 percent of GDP output and only 13 percent in employment while the service industry controlled 83 percent of exports by 2003 (ONS, 2009). Although Britain is sixth world industrialised country, its manufacturing industry as in the US has been rapidly overtaken by the services industry. During the 1970s and 80s, the sector lost approximately 3.5 million jobs while the services industry created a similar number of jobs in the 1990s particularly in the financial sector the country’s largest employer [see Figure: 2]. The change in momentum from the manufacturing to services has been reflected in the geographical spread shifting from the northern regions to