Tuesday, 8 July 2008

Another manufacturing recession

Manufacturing is heading for another downturn. Production data for May shows the manufacturing falling.

It is questionable whether this reversal matters much. Manufacturing now employs about one person in ten. Moreover, in the last 5 years, manufacturing has gone through at least two extended downturns. Even before the Summer credit crunch, manufacturing was in trouble.

13 comments:

Anonymous said...

Previously we had debt-funded imports to paper over the cracks. It's always mattered. This time it'll be noticeable.

Nick

electro-kevin said...
This comment has been removed by the author.
electro-kevin said...

Crikey. You're a right barrel of laughs aren't you, Alice ?

I come here to get down off my morning high.

(I'm only joking)

We should have gone technological and concentrated on keeping a small but well skilled and educated population.


Some of your commenters may point out that car production has never been higher in the UK. This is not strictly true. At least not according to a fellow train driver who used to be automotive design engineer. Assembly is what we do now - even the rocker assemblage arrives in the UK fully set up and ready to bolt on.

That's why he drives trains now - no job satisfaction or proper remuneration for his immense skills and education.

Markbaldy said...

Sad to think that Great Britain was once the leader in manufacturing and actually EXPORTED
stuff like trains, machinery and know how.
The only thing coming out of the UK now are people who have had enough of being lied to, ripped off, putting up with third world class services... whilst paying top rates to simply exist.
Before I also get out of this cesspit called the UK, I would like to know what are Gordon Brown's "strong fundementals" of our economy...are there any or was it just a mirage based on house price inflation/consumer borrowing?

Anonymous said...

The 'Bubble' economy we have had since the late 80's has relied too much on easy credit to finance a pretty bland service economy.

The strange thing is that UK consumers still pay well over the odds for the value of goods and services they receive compared with other countries -perhaps because most of them are overcharging for the rather modest services they offer each other!

Vanity allows people to think of mortgages as 'products' and that a rather unattractive UPVC window is really worth several days' pay after tax for the average worker.

Vanity, or dishonesty, has also allowed the overpaid estate agent to think his shambollic, slow and mediocre sales service is worth a few per cent of the price of a house!

Then there are all those not very able bureaucrats in both the public and private sectors who have no genuinely productive skills. Their obsequious meeting-sitting and paper-shuffling is only a burden on the economy. Their pay is only worth throw-away Bluewater fashion.

Why has the UK economy been working like this? Easy credit and the false feeling of wealth created by the housing bubble...

Now the credit has dried up, the service economy will slide, and the currency will slide, aided by over-tolerated inflation.

Then UK consumers will discover what the real value of their 'services' is compared with foreign manufactures.

Is a Starbucks skinny latte really worth two T-shirts at Tesco or a pair of jeans at Asda? Does a label or a bit of printing really multiply the value of a T-shirt twenty-fold? Are high street mark-ups of 80% of more of end price really justified - or earned?

Profligate UK consumers have been kidding themselves that such things are worth what they have been paying for them. Desperate UK consumers are now deciding that they are not. Not even if it's a Marks and Spencer or Jonelle label.

UK Plc will learn that it's better to have three million low-paid manufacturing jobs, which would at least contribute something to the economy, than three million unemployed waiters on benefits that a declining GDP service economy can't really afford.

B. in C.

sobers said...

B in C: Absolutely spot on!

I look at most of the people I know and the jobs they do - I can't think of one who does anything related to actually making anything. A good proportion of them are total drains on the public purse - teachers, NHS etc etc. Some IT, some sales, some charity work, some financial services.

For the record I do make something - I'm in farming so do produce a real product. But also get EU subsidies so can't really be too high horse about it all!

Anonymous said...

Most jobs are worthless, in the sense that if we eliminated them the only people who'd suffer would be the people who got paid to do them.

I think the average Brit is looking long and hard at the deductions line on his payslip and realising just how good his life could be if that wasn't being stolen from him.

Hopefully he'll connect the dots and figure out who is doing the stealing and why.

Nick

SACKERSON said...

"A good proportion of them are total drains on the public purse - teachers, NHS etc etc."

Currently I'm teaching (because I forecast the financial crisis in 1999), and while I'm looking after these hooligans they can't be burgling, stealing your hub caps or setting fires. Watch what happens in school holidays. I became a teacher thinking it was about education (and to some extent it is), but the extension of school hours (after school clubs, pre-school breakfast etc) makes it clear that as far as the government is concerned, a major function is as a baby-minding service.

It probably pays for itself in social control terms, but if you want my job, I can send you an application form.

Anonymous said...

I agree that teaching as it is now is basically taxpayer funded babysitting. Unfortunately by not being honest about it it leaves so many people with unrealistic expectations and allows teachers to make pay claims they don't deserve.

Judged by outcomes I think it's clear that most teachers are worthless, as are the administrators who hamstring them, and the educationalists who push their postmodernist relativism into the syllabus.

Nick

Anonymous said...

On worthless jobs:

Bosch
Siemens
Volkswagen inc. Audi
Porsche
Daimler/Mercedes
Bayerische Motorenwerk
...and all the Mittelstand engineering companies in southern Germany

The jobs in these companies are not worthless, the proof being all the super-reliable and high-value cars and appliances City salaries buy with such German labels on.

As the money is not going to be there to pay for these products, these companies will have to trim jobs, as Siemens have already done, because the bottom line matters.

What can we set beside that list in the UK? The shop-front list at Bluewater?

I'm sure we make some pretty good high-tech armaments which help the balance sheet - but is that enough?

B. in C.

SACKERSON said...

"...most teachers are worthless, as are the administrators who hamstring them, and the educationalists who push their postmodernist relativism into the syllabus."

Bit of a generalisation, young Nick, and rather a scattergun approach, to boot. But something the profession has to bear - the lower classes growl "You think you're better'n'us, don't'cha?" and the rest regard teachers as distinctly below stairs people. Can't wait to ditch the last vestige of respectability and get paid purely in money.

Turning to the wider economy, perhaps the last 12 months' 15-20% slide of Sterling against the Euro will fudge our manufacturing survival for a little while yet.

sobers said...

Sackerson: I meant "drains on the public purse" in a cash sense, net money in and out. I realise that education has a "value", though I would argue the current production of the state education service leaves much to be desired. We spend more than ever and get many people who can't read, or write coherently.

But I wouldn't want your job for all the tea in China! Not unless corporal punishment was reinstated in schools and some discipline imposed. Fat chance of that either.

SACKERSON said...

Sobers, I continue this over at mine - do join me if you're interested!