“Underwhelming” UK Industrial Production Figures not the Whole Picture
Figures released last week by the Office of National Statistics showed that industrial production rose by only 0.3 per cent between May and June, drawing negative reaction from city analysts. However, many firms in the Midlands are not so down beat. Corporate Partner Rick Smyth looks at both the figures and the reaction from firms based in the region.
Figures released yesterday by the Office of National Statistics showed that seasonally adjusted index of production increased by 0.3% between Q1 2014 and Q2 2014, below the forecasted rise of 0.4% included in the GDP preliminary estimate. This reflected increases of 4.4% in the electricity, gas, steam & air conditioning sector; but only a 0.2% increase in the manufacturing sector. Partially offsetting these increases was a decrease of 2.5% in the water supply, sewerage & waste management sector. The seasonally adjusted index of manufacturing increased by 0.3% between May 2014 and June 2014.
Although the figures were met with a measure of disappointment from senior economists, manufacturing businesses based in the Midlands are less pessimistic.
Shaun Gray, CEO of Yonghe Precise Metals Europe notes “The key indicator for many manufacturing businesses is the PMI [Purchasers’ Managers’ Index]. Although it is at its lowest for a year at 55.5, it remained firmly above the 50%. Although this is below the predicted level, the figures for the last year reflected the fact that a lot of manufacturers were starting from a fairly low base (following the slowdown after the 2010/11). In our view the current level of enquiries and general activity is still very positive and represents a far more sustainable picture for manufacturing in the medium term.”
John Temple, CEO of ETG Engineering Group agrees. “PMI for manufacturing was still above 50% which indicates growth. Manufacturing is strong, We will make 1.6m cars in the UK this year (more than France) and buy 2.45m. We are also the second largest aerospace manufacturer in the world.”
”Growth is back to pre recession levels (in total, not per head) and we are growing faster than any other G7 nation (including US and Germany).”
Rick Smyth comments, “It is encouraging to hear that despite these figures the majority of firms we spoke to in the region remains determinedly upbeat. Whilst it is not a universal picture – and one industry source noted that OEM customers were not taking up all of the orders predicted a year ago – it is certainly not as gloomy a picture as some media commentators would have us believe. Both the US and far east export markets remain strong and we are seeing encouraging levels of international investment coming in the region in the sector.”
For further information please contact Rick Smyth on 0121 233 4333 or [email protected].