Tuesday, 7 December 2010

Lucky George, manufacturing points the way for UK economy!

Two sets of figures released in the last week have provided a tremendous boost for UK manufacturing.

For those who missed the stories the main points are these. The Manufacturing Purchasing Managers' Index rose to 58 in November, the highest the index has been since September 1994. Essentially, any number above 50 signifies growth rather than contraction.

The hiring part of the index was particularly strong, showing that manufacturers took on employees at their fastest rate since the survey began 18 years ago. Wait, there’s more. Backlogs of work (yes backlogs!) increased for the first time in five months, the data revealed, while new orders rose at their fastest pace since April.

This was followed yesterday by even more positive numbers from the Engineering Employers Federation. Strong positive output and order balances for third quarter running across all sectors of manufacturing, good investment and training numbers, a significant jump in price balances and increasing optimism.

All in all these both these sets of figures seem to suggest that private sector growth could be quite a bit stronger than the doom-mongers at the IMF are currently predicting which means that the Coalition Government’s economic bet could come good.

The key issue now is, will this continue into 2011. It’s probably still too early to say, but the Government badly needs business, and manufacturing in particular, to take up the baton and drive growth forward as we slowly deleverage consumer debt without tipping ourselves into another recession.

Napoleon used to say that he wanted ‘lucky’ generals. If it carries on like this for George Osborne, our Prime Minister might well have found himself one.


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