Discover more about economic statistics.
There’s an insightful article at NGen by Jayson Myers, Chief Executive Officer. Jayson is a Canadian business economist specialising in industrial and technological change. Jayson says it’s time we updated the meaning of manufacturing.
Jayson questions the current role of economic statistics to measure productivity and overall business performance. Economic statistics are important in that they define how manufacturers see themselves and their competitors. Public statistical agencies are woefully behind the times and have a distorted view of manufacturing that can be misleading if companies are trying to benchmark against industry-wide data.
Distorted statistics cause misguided policy decisions by governments, understate the value of manufacturing output and understate the importance of the sector. Macro statistics tend to mask the productivity improvements and growth of companies.
The problem is that the definition of manufacturing usually only includes those producing goods. Much of the sales, jobs and value added that were once recorded in manufacturing are now being tracked in the services sector. There are parts of ‘unseen’ manufacturing in engineering, technology and logistics. More realistic quantification could include measures such as production, innovation, and customer service.
As an example, the Canadian economy has shrunk from 16 to 11 percent over the past 20 years. However, the supply chain around manufacturing has grown to almost 45 percent of total economic activity.
Jayson advises we take care when using economic statistics.