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UK Manufacturing - what's really going on?

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vrdiver
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UK Manufacturing - what's really going on?

#50613

Postby vrdiver » May 2nd, 2017, 2:06 pm

In March, the Guardian published* a piece titled "UK manufacturing sector registers worst performance in years"

From the article:
Britain’s factories suffered a decline in growth of domestic orders in February which, coupled with a second month of falling exports, saw them register their worst performance in almost three years.

(my bold)

Today, Digitallook publishes** "UK manufacturing activity spikes to three-year high"

from the article: "this was the manufacturing sector's ninth month of expansion in a row"


Lies, damned lies and statistics comes to mind, but what's really going on?



* http://www.theguardian.com/business/201 ... omy-growth
** http://www.digitallook.com/news/news-an ... 48868.html

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Re: UK Manufacturing - what's really going on?

#50617

Postby tea42 » May 2nd, 2017, 2:19 pm

The Guardian is a left wing naysayers rag for teechers. That's what's going on...

gryffron
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Re: UK Manufacturing - what's really going on?

#50691

Postby gryffron » May 2nd, 2017, 6:10 pm

There's nothing inconsistent about those two statements. They are just different ways of reporting the same news. Good indication that you should look for the story behind the headline.

Gryff

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Re: UK Manufacturing - what's really going on?

#50692

Postby Itsallaguess » May 2nd, 2017, 6:16 pm

vrdiver wrote:In March, the Guardian published* a piece titled "UK manufacturing sector registers worst performance in years"

From the article:
Britain’s factories suffered a decline in growth of domestic orders in February which, coupled with a second month of falling exports, saw them register their worst performance in almost three years.

(my bold)

Today, Digitallook publishes** "UK manufacturing activity spikes to three-year high"

from the article: "this was the manufacturing sector's ninth month of expansion in a row"


Lies, damned lies and statistics comes to mind, but what's really going on?


The manufacturing sector has seen nine months of expansion in a row, but in March the rate of that expansion was the worst performance in years.

Two consistent statements, each spun to meet the needs of the readership of each media outlet.....

Cheers,

Itsallaguess

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Re: UK Manufacturing - what's really going on?

#50725

Postby GoSeigen » May 2nd, 2017, 8:55 pm

vrdiver wrote:In March, the Guardian published* a piece titled "UK manufacturing sector registers worst performance in years"

From the article:
Britain’s factories suffered a decline in growth of domestic orders in February which, coupled with a second month of falling exports, saw them register their worst performance in almost three years.

(my bold)

Today, Digitallook publishes** "UK manufacturing activity spikes to three-year high"

from the article: "this was the manufacturing sector's ninth month of expansion in a row"


Lies, damned lies and statistics comes to mind, but what's really going on?



Er, one was published in March 2016, the other in May 2017. Forget the nonsense about the Guardian -- I think a little more attention to publishing dates might be the answer!

GS

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Re: UK Manufacturing - what's really going on?

#50939

Postby funduffer » May 3rd, 2017, 2:55 pm

I think the difference is that in March 2016 manufacturing was in the doldrums.

Since then we have had Leave result in the referendum, devaluation of the pound, and hence boost to exports.

Hence boost to manufacturing in March 2017.

FD

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Re: UK Manufacturing - what's really going on?

#52091

Postby modellingman » May 8th, 2017, 7:37 pm

The latest Markit/CIPS press release for the UK manufacturing PMI is here. It contains a time series chart showing the monthly index since 2000.

Series for other sectors and territories are also available.

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Re: UK Manufacturing - what's really going on?

#78615

Postby DiamondEcho » September 2nd, 2017, 12:22 pm

The positive news continues:
----------------------------------
'IHS Markit/CIPS UK Manufacturing PMI
Manufacturing growth gathers pace as new order inflows strengthen

'Key findings:
- Manufacturing PMI at four month high of 56.9
- Broad based expansion seen across all product categories
- Input price inflation accelerates for first time in seven months
Summary:
The rate of expansion in the UK manufacturing sector accelerated again in August. This was highlighted by the seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index (PMI) posting 56.9, up from 55.3 in July, to its second highest level in over three years.

------------------------------------

That's just the intro; the full report is here:
https://www.markiteconomics.com/Survey/ ... 69d0c196cf

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Re: UK Manufacturing - what's really going on?

#79035

Postby dspp » September 4th, 2017, 10:51 am

One thing to bear in mind when reading these survey results is that they are driven to an extent by sentiment and hope in the people submitting their returns. So I tend to put quite a big mental error bar around them. They can however be a leading indicator of what are inevitably retrospective GDP etc stats published later, and which then in due course get corrected, to eventually be about right looking two years into the retro-mirror. So useful, but not infallible.

At present wage suppression in the UK via sterling is a definite factor. So too are raw material prices ticking higher. So those few UK factories that do exist, can in some circumstances have a flush period (now) until the inflationary pressures feed through (any moment) and of course the single market access is (still) in place.

But that is just manufacturing. Outside of manufacturing the reality remains that the UK continues to have a balance of payments problem. I cannot see UK manufacturing expanding from this very low base to refill that gap in my lifetime.

regards, dspp

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Re: UK Manufacturing - what's really going on?

#79040

Postby FredBloggs » September 4th, 2017, 10:56 am

dspp wrote:One thing to bear in mind when reading these survey results is that they are driven to an extent by sentiment and hope in the people submitting their returns. So I tend to put quite a big mental error bar around them. They can however be a leading indicator of what are inevitably retrospective GDP etc stats published later, and which then in due course get corrected, to eventually be about right looking two years into the retro-mirror. So useful, but not infallible.

At present wage suppression in the UK via sterling is a definite factor. So too are raw material prices ticking higher. So those few UK factories that do exist, can in some circumstances have a flush period (now) until the inflationary pressures feed through (any moment) and of course the single market access is (still) in place.

But that is just manufacturing. Outside of manufacturing the reality remains that the UK continues to have a balance of payments problem. I cannot see UK manufacturing expanding from this very low base to refill that gap in my lifetime.

regards, dspp

And, that's more the pity. If we somehow managed to double our manufacturing output, the benefit to UK PLC would be barely noticeable. And here's me, UK manufacturing born and bred, plying my trade overseas. Designing and building those manufacturing plants that we used to have... If you can't beat them etc......

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Re: UK Manufacturing - what's really going on?

#81543

Postby GJHarney » September 16th, 2017, 9:08 pm

One of the issues in the past year has been the exchange rates, but I got confused with this aspect so here is a question that I has been puzzling me for a while. Obviously a 'weak' pound helps exports at the border as the goods/materials become cheaper for overseas buyers. However, as many manufacturers need to import raw materials there is then obviously a problem in that these become more expensive with a 'weak' pound which drives up manufacturing costs (which at some point must be passed on to the buyers). So while I know that this dichotomy will be very different in different manufacturing sectors, across the British economy as a whole is there a situation where a 'weak' pound is definitely a benefit to exports overall, or not?

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Re: UK Manufacturing - what's really going on?

#81658

Postby Nimrod103 » September 17th, 2017, 7:25 pm

GJHarney wrote:One of the issues in the past year has been the exchange rates, but I got confused with this aspect so here is a question that I has been puzzling me for a while. Obviously a 'weak' pound helps exports at the border as the goods/materials become cheaper for overseas buyers. However, as many manufacturers need to import raw materials there is then obviously a problem in that these become more expensive with a 'weak' pound which drives up manufacturing costs (which at some point must be passed on to the buyers). So while I know that this dichotomy will be very different in different manufacturing sectors, across the British economy as a whole is there a situation where a 'weak' pound is definitely a benefit to exports overall, or not?


This article in today's Telegraph covers the issue (http://www.telegraph.co.uk/business/201 ... ker-pound/).
British industry imported raw materials go up in cost, but the value added by British manufacturing stays the same in Pounds, but is of course reduced in foreign currency terms. This will affect different industries in very different ways. For example, a piece of software devised and generated in the UK has almost no imported raw material, so the vendor exporting to the Eurozone can either reduce his price in Euros and thus sell more, or keep the price the same and pocket the difference in higher profit margins. One hopes they choose the former course of action, but even if they choose the latter they can raise their dividend payout, and the dividend receivers can buy more shares in successful British enterprises.

This is the lesson of our exit from the ERM debacle in 1992, which has largely been forgotten by ignorant economists, politicians and pundits. But the second lesson of the ERM debacle, is that the country should use the opportunity of devaluation to make the economy more efficient and export orientated. Not fritter it away in a public sector pay binge and housing binge like was done in Blair/Brown's second term of Govt when they no longer followed Conservative spending limits.

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Re: UK Manufacturing - what's really going on?

#81668

Postby dspp » September 17th, 2017, 8:48 pm

There is also a short term effect and a long term effect. Short term a net importer (which UK is) with a negative balance of trade should be worse off due to a devalued currency. Then the local economy ought to restructure over the longer term to substitute those imports. Then the local economy ought to adapt to increase exports as it becomes more competitive. One ought to end up with a better balance of trade. This is the classical explanation.

The problem in the UK has historically been a) politicians keep spending any windfall gains that ought to facilitate restructuring, and b) the City sector is so large (relative to the rest) that it can whipsaw currency & interest rates around faster than the economy can restructure. Both these means the risk inherent in investing in sectors such as manufacturing in UK is greater than the risk inherent in investing in the corresponding project in Germany. So at a macro level Germany specialises in manufacturing and UK specialises in financial services over fairly lengthy periods. The decline in UK manufacturing for these reasons goes back to at least the 1920s imho.

regards, dspp

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Re: UK Manufacturing - what's really going on?

#81675

Postby Nimrod103 » September 17th, 2017, 9:55 pm

dspp wrote:There is also a short term effect and a long term effect. Short term a net importer (which UK is) with a negative balance of trade should be worse off due to a devalued currency. Then the local economy ought to restructure over the longer term to substitute those imports. Then the local economy ought to adapt to increase exports as it becomes more competitive. One ought to end up with a better balance of trade. This is the classical explanation.

The problem in the UK has historically been a) politicians keep spending any windfall gains that ought to facilitate restructuring, and b) the City sector is so large (relative to the rest) that it can whipsaw currency & interest rates around faster than the economy can restructure. Both these means the risk inherent in investing in sectors such as manufacturing in UK is greater than the risk inherent in investing in the corresponding project in Germany. So at a macro level Germany specialises in manufacturing and UK specialises in financial services over fairly lengthy periods. The decline in UK manufacturing for these reasons goes back to at least the 1920s imho.

regards, dspp


Some of what you write may be true, but there has been (since the 1920s) a widely held condescending view of British manufacturing among the academics, artists and opinion formers. Dyson has pointed it out yesterday (http://www.telegraph.co.uk/news/2017/09 ... cscreated/). The Brunel portrayed in the Olympics ceremony was a travesty. The satanic portrayal of British industry was disgusting, and contrasted with Doyle's portrayal of an angelic NHS, a model of healthcare which no other country has copied. No wonder British industrialists give up or move abroad.

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Re: UK Manufacturing - what's really going on?

#81695

Postby FredBloggs » September 18th, 2017, 7:25 am

Sad to reflect, engineering, at the heart of all manufacturing processes, and the UK. The Engineering Council UK some time ago did a public opinion poll asking who the most famous British engineer of all time was. They were expecting names like Brunel, Watt, Whittle, Stephenson etc... The most popular answer given - Kevin the mechanic from Corrie.

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Re: UK Manufacturing - what's really going on?

#81708

Postby dspp » September 18th, 2017, 9:00 am

Nimrod103 wrote:Some of what you write may be true, but there has been (since the 1920s) a widely held condescending view of British manufacturing among the academics, artists and opinion formers. .... No wonder British industrialists give up or move abroad.


I fully agree. It is all part of the same systemic problem imho.

regards, dspp

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Re: UK Manufacturing - what's really going on?

#81854

Postby GJHarney » September 18th, 2017, 6:03 pm

Nimrod103 wrote:
... NHS, a model of healthcare which no other country has copied.


You are factually incorrect.

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Re: UK Manufacturing - what's really going on?

#81865

Postby Nimrod103 » September 18th, 2017, 6:44 pm

GJHarney wrote:
Nimrod103 wrote:
... NHS, a model of healthcare which no other country has copied.


You are factually incorrect.


Which countries have copied it?
This article says nobody has:
https://www.thetimes.co.uk/article/if-t ... -mtgmkt5bd

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Re: UK Manufacturing - what's really going on?

#82076

Postby GJHarney » September 19th, 2017, 4:20 pm

Nimrod103 wrote:
GJHarney wrote:
Nimrod103 wrote:
... NHS, a model of healthcare which no other country has copied.


You are factually incorrect.


Which countries have copied it?
This article says nobody has:
https://www.thetimes.co.uk/article/if-t ... -mtgmkt5bd



I can't read the article without signing up, which given it is Murdoch owned ain't going to happen! Regardless, there are a number of countries, both in Europe and around the world, who have 100% government taxation funded public healthcare systems similar to the NHS (from memory there are broadly four healthcare models, the NHS fits into one of them and is not unique although it does have some historical peculiarities). The Bismark/Prussian insurance model is more common, but nevertheless 100% government public healthcare systems like the NHS both exist elsewhere, and like the NHS also hold their own in terms of healthcare outcomes based on per £/$ per head of population spent on them. It is for a different thread, but the issue with the NHS is that it has one of the lowest government spends per head of population than just about any other European or other developed nation and only its economies of scale have, so far, saved it from collapse as a result of this now chronic under investment.

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Re: UK Manufacturing - what's really going on?

#82079

Postby robbelg » September 19th, 2017, 4:28 pm

It would be helpful if you named some of them.


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