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Key Performance Indicators

What we do

One of the strong findings of our review of external stakeholders was the need for a set of headline Key Performance Indicators that allow a qualitative and quantitative assessment of the climate of the UK's manufacturing sector - and help us to monitor its performance and the effectiveness of the actions of Government, business and others in supporting the sector.

Working with stakeholders including the TUC, CBI and EEF, and drawing on the expertise of KPMG, we have developed a set of Key Performance Indicators, which:

Are specific to manufacturing

Are measurable over time

Allow continuity and annual updating

Can provide an international comparison of the UK's performance

The aim is to provide an 'at a glance' view of the current state of manufacturing, with the emphasis on simplicity rather than comprehensiveness. The measures we have chosen are:

Output shows the level of value added of the UK manufacturing sector. It is calculated by subtracting the value of inputs from the value of outputs, and is indexed using 1990 as the base year.

Investment shows the level of new investment in the UK manufacturing sector, and is indexed using 1990 as the base year.

Innovation uses Business Enterprise Research and Development spend in manufacturing businesses as a proxy for innovation in UK manufacturing, and is indexed using 1990 as the base year.

Productivity uses labour productivity, on the output per hour measure, as a proxy for total productivity in UK manufacturing. It is calculated by dividing total manufacturing output by total hours worked, and is indexed using 1993 as the base year.

Profitability is measured using the rate of return. This is calculated by dividing total industry profits by total industry capital, and is expressed as a percentage.

Skills shows the proportion of qualifications at different levels held by the UK workforce.