Despite the tiny increase in growth in domestic production the UK economy – due to adjusted figures(pdf) from the Office for National Statistics (O.6 per cent, from 0.5 per cent) for the third quarter of 2011, manufacturers are still worried a double-dip recession is looming as the slight revised increase was based on higher growth in agriculture, construction and services.
The revised improvement was soon quashed, however, by a downward revision, from 0.2 per cent to straight zero for the second quarter of 2011.
Whilst some in the media hailed the tweak as “good news” the reality is that it was a ‘dead cat bounce’ – the economy is still flatlining and unchanged, the medicne clearly is not working.
Chris Williamson, chief economist at financial services information company Markit, said: “The underlying trend is very clearly one of an economy that is struggling in the face of what seems to be an ever-growing list of headwinds.”
The government seems helpless to change things.
2011 was a bad year for manufacturing. George Osborne’s predictions manufacturing would lead the charge and take up the job losses in the public services has been blown wide apart as order books in many industries were hit by the public sector squeeze and job losses, reducing the spending power for manufactured goods. And with companies’ defence industry cuts leading to companies such as BAe Systems announcing potential big job losses the outlook is still bleak.
The fact remains that the government is incapabale of developing anything like a serious policy for manufacturing.
The one bright note comes from the UK car industry where the Society Of Motor Manufacturers and Traders (SMMT) chief executive Paul Everitt said: “2011 has been a very significant year for the UK motor industry. We have seen a remarkable series of investment announcements by global vehicle manufacturers with a total of £4 billion of investment promised for the UK, securing new model programmes, production facilities and jobs.”
The first month in 2012 is crucial. All eyes will be on the Indian government announcement as to who it has chosen to win the £7 billion contract for new figther aircraft Eurofighter Typhoon or the French Dassault Rafale – a contract worth £7 billion. It is a contrat we have to win.
See also: Grim economic news II: OECD cut UK growth prediction. Again – Alex Hern, December 13th 2011
Cameron sells out UK manufacturing for his loony backbenchers – Tony Burke, December 12th 2011
George Osborne is the downgraded chancellor of a deflationary government – William Bain MP, December 8th 2011
Economic update, December 2011 – UK teeters on brink of recession – Tony Dolphin, December 5th 2011
A new strategy to help save UK manufacturing – Tony Burke, December 5th 2011
First published on Left Foot Foward on December 23rd.