A breath of fresh air
Do you think it is safe to stop holding my breath now? For the past few months the recovery in manufacturing has looked too good to be true, but I am starting to think that maybe I can stop worrying – writes Andy Sandford.
Figures from organisations such as the CBI are certainly reassuring. Its latest Industrial Trends Survey shows improving demand for UK-made goods, especially from abroad. 28% of manufacturers said that export orders were above normal compared to 17% that said they were below, giving a net balance of +11% – which is the highest since July 1995 and up from zero in January.
It’s not just exports though. The same survey showed that 23% of firms reported that total order books were above normal compared with 30% who said they were below normal. This might sound like a negative result, but the resulting balance of -8% is twice as good as January (-16%), and is well above the long-term average of -18%.
These figures prompted the CBI’s chief economic adviser, to comment that ‘with expectations for output growth at their strongest since before the recession, the recovery in the manufacturing sector remains well on track, and the sector should continue to make an important contribution to broader economic growth’.
Well, statistical facts are one thing, but for evidence you can rely on I much prefer anecdote and gossip. So it was a real pleasure to go to the Southern Manufacturing show and hear so much good news from the companies I spoke to there.
Almost every other subcontractor I spoke to had recently ordered a new machine – and we are not just talking mini mills, these were £500,000 laser cells, 5-axis horizontal machining centres and mill-turn lathes. So the credit crunch has obviously eased up, or the machine tool suppliers are finding new ways to finance investment. And those companies that had installed new capacity in the past year or so were telling me that it was already working at full stretch.
One company even told me that they didn’t want any more work – in which case it was a bit of a mystery why they were spending several thousand pounds exhibiting at a trade show – and one person complained there were too many visitors because they had to queue up for their bacon butty.
Setting aside the curmudgeon factor though, my own anecdotal industrial trends survey definitely shows a very healthy outlook – and no more need to hold my breath.
