Save us from the surveys!

A quick take on the two business surveys which came out this morning, namely the Business Trends Optimism Index from accountants BDO (which I’m beginning to think should be renamed the Pessimism Index) and the CIPD staffing survey.

The Pessimism Index fell to 95.1 in July from 95.6 in June and the Chartered Institute of Personnel and Development (CIPD) say that more employers plan to cut jobs than increase staffing levels in the third quarter.

Both surveys point to a drop in confidence in the ‘fragile’ manufacturing sector as a cause which is indeed worrying, particularly for one who makes his living from engineering PR, but I am not going to throw myself off a bridge just yet. Two reasons, firstly manufacturing makes up just 13 per cent of UK GDP. Now, admittedly, that is still a fairly large chunk, but for both surveys to point to poor performance in the sector as a reason for a downgrading of overall business confidence feels a little bit over the top. Manufacturing and a ‘rebalancing’ of the economy may be the key to a sustainable recovery but that goal is going to take years not months!

Secondly, anecdotally I have one multi-national manufacturing client who has just enjoyed their best quarter since 2006 and another who has recently told their salesforce to stop selling as they can’t keep up with orders! In short, I do wonder whether (and I hope) conditions on the ground are better than what the surveys are telling us.

PS: I saw BDO partner Peter Hemington interviewed on BBC Breakfast News this morning. He seems like a nice chap but I have to take him to task on one point, namely his extraordinary generalisation about UK manufacturing, namely that, “these days manufacturing in the UK is more about bolting things together that are made in the Far East". Errr …. I beg to differ and I can think of multiple factories within a 30 minute drive of where I sit which could prove him wrong!