Manufacturing - the great hope for George Osborne to lift the UK economy from sluggish growth - is going into reverse.
There was even more bad news for David Cameron and George Osborne again this week with new data showing that activity across the UK’s manufacturing sector fell in July. This was the first contraction since July 2009, but also followed bad figures for the economy last week as a whole.
The influential Markit/CIPS manufacturing purchasing managers’ index placed activity at 49.1 – where a figure below 50 signifies contraction – showing a slump after the 09/10 surge.
All the indications that the union Unite is picking up from industry and from members in manufacturing is that, apart from a few specific sectors such as aerospace and motors, manufacturing is in the doldrums, with Cameron, Osborne and Cable at a loss as what to do.
New orders and employment levels are dropping. The much vaunted manufacturing lead recovery – Osborne’s so-called ‘march of the makers’ – is evaporating before the Government’s eyes.
The idea that manufacturing could soak up the thousands of lost in the public sector is a myth that has been exploded as the cuts bite and consumer confidence and domestic demand continue to fall. The alarms bells are ringing loud and clear, and can probably be heard as far away as David Cameron’s Tuscan holiday retreat.
Also the latest sluggish growth predictions from the CBI further reinforce the need for an economic Plan B before the economy goes into a nosedive. The CBI has lowered its forecast for the UK’s GDP in 2011, predicting growth of 1.3 per cent, down from its previous prediction of 1.7 per cent, made in May.
Unite has put forward proposals to defend and help manufacturing but Cameron and Co have deaf ears.
Unite’s proposals are:
• Building a framework of policies to defend strategically important industries;
• Continued financial support through interventionist policies;
• Targeted support for small and medium sized enterprises; better use of government purchasing power to secure manufacturing jobs in the UK; and
• Maximising the opportunities that the low carbon revolution offers.
Unite would also like to see the delivery of an education and skills framework which meets all industry’s needs, the creation of an education structure which builds on the science base so necessary to secure high skilled job, the right investment environment for research and development, a level playing field to deliver security and fair pricing for energy and a framework of legislation which promotes transparency and engagement for all stakeholders in the future of manufacturing.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.