UK manufacturing ‘powering ahead’

The UK manufacturing sector is in rude health, thanks in large part to strong demand from overseas customers, an industry survey suggests.

The Engineering Employers Federation says the sector will outperform the rest of the economy next year.

However, the group says further expansion will depend in part on continued recovery in overseas markets.

Meanwhile, business group CBI has called manufacturing the “unsung hero” of the UK economy.

‘Record output’

After surveying more than 500 leading firms, the Engineering Employers Federation (EEF) said manufacturing firms were “powering ahead” by recruiting new staff and investing in their businesses.

“Manufacturers are ending the year on a high and should enter 2011 on a strong footing,” said the group’s chief economist Lee Hopley.

“The survey has shown record responses on output and orders for much of this year and, if this continues, we should see exports and investment delivering better balanced growth across the economy.”

However, he added that firms were struggling to find enough skilled workers and were facing rising input costs.

He also sounded a note of caution about the wider economic recovery, which he called uncertain.

”UK manufacturing is in many ways the unsung hero of our economy” – John Cridland, CBI

Government role

The CBI also argued manufacturing is “well placed to lead the country’s recovery”.

“UK manufacturing is in many ways the unsung hero of our economy,” said John Cridland, the group’s soon-to-be director general.

“Big productivity gains in the past 10 years have made it leaner than ever before.”

However, he said the government needed to play its part in the sector’s continued revival.

It must create a tax and regulatory environment to help manufacturers double the growth rate of exports by 2020, he said.

Spending cuts

Last week, a closely-watched survey suggested the UK manufacturing sector grew at its fastest rate for 16 years in November, with a record rise in employment.

The government has stressed the need for exports to play a greater role in future economic growth, particularly in light of its spending cuts and tax rises that are expected to hit consumer spending.

Manufacturing currently accounts for about 13% of the UK’s total economic output.

 

 

 

 

Source: http://www.bbc.co.uk/news/business-11921894

 

Spending cuts will delay jobs recovery says ILO

It will take five more years for the job market in many countries to return to pre-recession levels, according to the International Labour Organisation.

The UN body says there are 23 million fewer jobs now than there were at the start of 2008.

It has warned that the spending cuts which have replaced stimulus measures in several countries will delay a full recovery in the job market until 2015.

The ILO studied the employment data of 69 developed and developing nations.

Deep Cuts

In its annual World of Work Report, the agency said that despite “significant gains” with economic growth, “new clouds have emerged on the employment horizon and the prospects have worsened significantly in many countries”.

Several European nations are implementing cuts in public spending in an attempt to rein in their budget deficits, which have risen because of falling tax revenues, stimulus spending and bank bailouts.

“Those policies that helped countries avoid the worst of the crisis are now withdrawn, and countries have applied very deep cuts in spending,” report author Raymond Torres told the BBC World Service.

“That, of course, is having an impact on jobs”.

‘Risks of demoralisation’

Around 40% of jobseekers have been without work for more than one year, the report says, running “significant risks of demoralization, loss of self-esteem and mental health problems”.

The ILO has recommended “active labour market policies”, such as focusing on vulnerable groups, particularly the young. It also suggests countries make better use of savings to spur productivity and job creation.

The report also notes that 25 countries have so far experienced social unrest since the financial crisis, including emerging economies.

The ILO predicts that global unemployment will be 6.5% this year, a slight fall from 6.6% in 2009.

Source: http://www.bbc.co.uk/news/business-11454455

Oil price drops on recovery fears

The price of oil has dropped to below $72 a barrel, its lowest level in more than two months, on renewed fears about the strength of the global recovery.

US light crude fell by $1.4, or 2%, to $71.66 a barrel, while London Brent dropped by the same amount to $72.26, after disappointing US home sales data.

Figures showed that existing home sales fell by 27% in July compared with the previous month, to a 10-year low.

The figures also pushed shares on Wall Street lower.

The main Dow Jones index closed down 134 points, or 1.3% at 10,045.

‘Continued pressure’

The weak housing sales figures fuelled concerns about the strength of the recovery of the world’s biggest economy.

They follow weak jobs market data and worse-than-expected retail sales figures released earlier this month in the US.

These have caused investors to question the strength of demand for oil going forward – the price of oil has now fallen by more than $10 a barrel this month.

“The shaky global economy continues to put pressure on crude prices,” said Victor Shum at Purvin and Gertz energy consultants.

Source: http://www.bbc.co.uk/news/business-11078345

Greek economy shrinks a further 1.5%

Greek have undergone a very down-turning year… economic recession, shrinking economy, debts and rescuing.

An article from BBC News.

The Greek economy shrank by a further 1.5% in the second quarter of the year, Greece’s statistics agency has said.

That adds to 0.8% decline in GDP recorded for the first three months of the year, suggesting that the decline in the economy is speeding up.

Greece’s GDP has fallen 3.5% since this time last year.

The country has been forced to bring in severe public spending cuts since it sparked a Europe-wide debt crisis earlier this year.

Greece’s statistics agency Elstat said the “significant reduction” in public spending had contributed to the deepening of the country’s recession.

Economists said they were not surprised by figures, and blamed the “uncertainty” surrounding the government’s austerity measures for the falls in GDP.

“Economic activity seems to be declining at an accelerated pace due to high uncertainty and the gradual implementation of austerity measures,” observed Nikos Magginas, senior economist at the National Bank of Greece.

The total decline in GDP during 2010 is forecast to hit 4%, according to the European Union and the International Monetary Fund.

A raft of austerity measures has been announced by Greece since December last year.

They include a pay freeze for public sector workers and reform to the tax and pensions systems.

(http://www.bbc.co.uk/news/business-10951857)