PUZZLED by the surprise 1.3 per cent fall in manufacturing output in May compared with April, announced this week? So were economists, so was the BBC and – of considerably less importance - so was I.
Analysts had been looking for a 0.4 per cent rise, rather more in keeping with the 0.3 per cent increase seen in April and the 0.5 per cent reported for March.
(What was that? You reckon these types just take the average of the previous two months and charge a lot of money for the resulting “forecast”? Wash your mouth out right now).
True, the year-on-year figure is still higher and the monthly fall could be, as has been suggested, something to do with the late timing of Easter. Or with a similar pause in Germany. Or both.
I preferred the remarks of Jeremy Cook, chief economist at currency company, World First (who is kind enough to send me his stuff, which is always worth reading) who said this “calls into question just how strong the balancing act of UK growth really is".
Another point worth making is that just because manufacturing industry is solid, part of the bedrock of the economy and so forth, that does not mean that manufacturing statistics are in the same category. The industrial base may be rich in jobs, skills and export opportunities, but that does not mean that manufacturing data rolls off the computer printer with all the predictability of Minis coming off the assembly line at Cowley.
Here’s some “previous”. Since January 2013 – just 16 months before the May data – the month-on-month figures have been as high as plus 2.1 per cent and as low as minus 1.5 per cent, a swing-round of 3.6 per cent.
Matters are a little more stable when you look at the broader “industrial production” figures, which take in also mining, quarrying, oil and gas and utilities. Here the high point since January 2013 was plus 1.3 per cent and the low point minus 0.9 per cent.
So while the expression “you can’t read too much into one month’s figures” ought usually to be ignored (especially when uttered by a Minister), this is a rare occasion on which it may be worth bearing in mind.
1) India’s free-market revolution (sort of, kind of, er…not really)
The new Indian government unveiled its first budget this week, an exciting event, no doubt, for those convinced that the new Prime Minister Narendra Modi is a bearded version of Mrs Thatcher. True, the manifesto of his Bharatiya Janata Party (BJP) contains a lot of stuff about supporting business and putting some stick about in terms of fiscal discipline.
But it contains also contains pledges such those to establish “ special courts to stop hoarding and black marketeering” and a “price stabilisation fund”.
I don’t think the people round at the Institute of Economic Affairs or similar would find anything very free market about all this.
Furthermore, the BJP programme – while suggesting budgetary tightening – conjures up rolling vistas of new expenditure commitments to help the new middle class: “Particular attention will be given to the government providing educational scholarships and educational facilities; medical insurance and quality health-care services; middle-income housing and efficient public transport systems.”
Ultimately, this is a nationalist movement, not a free-market campaign. It is a sort-of continent-scale version of UKIP, as uninterested in economics as are Nigel and the boys.
The BBC’s Indian budget coverage noted: “Mr Jaitley [Arun Jaitley, finance minister] said subsidies - which cost India $40bn (£23bn) every year - would be overhauled to make them ‘more targeted’ but offered no detail.”
2) Germania revisited
AFTER what my research people tell me was a creditable performance in a sporting fixture of some sort with another, with a similar event scheduled for later this weekend, it seems Germany is feeling rather pleased with itself.
Fine by me. In an understated sort of way, I’ve long been a Germanophile and would love to read a really good one-volume history of West Germany, treating it not as a way-station between the Allied occupation and re-unification but as a country with its own arts, culture, economy, diplomatic interests and social structure.
But I worry that the current wave of admiration for all things German is taking us into what have proved to be tricky waters in the recent past. At least one letter to the papers this week has sought parallels between the country’s sporting prowess and the “long term” attitude of its business leaders.
We heard a lot of this in the Nineties, with admirers suggesting something innately superior in the German priority of turnover and market share over the “Anglo-Saxon” priority of profits, not to mention German industry’s “partnership” with the trade unions in contrast with the adversarial industrial relations practised in Britain.
Well, maybe but at least the “Anglo Saxons” believed in a certain open-ness with shareholders and others. In September 1993, Daimler Benz – then (and probably now) Europe’s biggest industrial group – had been about to report a half-year profit of 168 million marks. However, it was planning also to list its shares on Wall Street, and in that haven of capitalist rapacity, companies are required to publish the real figures, as opposed to ones that may be convenient for the board of directors.
Daimler Benz, it emerged, had actually made a half-year loss of nearly one billion marks.
3) Ssss….you know who
ANYONE doubting the fit and proper qualifications of Baroness Butler-Sloss to chair the latest of the interminable “child abuse inquiries” need only read her letter in The Daily Telegraph on June 11 “welcoming” the Coalition’s proposal to jail parents who fail to show their children enough love. Here are the authentic accents of the modern British State, simultaneously glutinous in its sentimentality, repulsive in its self-righteousness and terrifying in its determination to invade every corner of private life.
The Baroness concluded: “The changes to current legislation are long overdue. Now we in turn must maintain the momentum with political and professional colleagues.”
Sorry, who’s “we”? Lady Butler-Sloss signed herself merely as a former High Court judge. But then, we know who “we” are, don’t we. “We” is “Them”, those whom Hugh Gaitskell described scathingly as “the people who really understand…the top people”.
While we’re on the subject of the current child-abuse mania, I think I can safely say that I personally find nothing much to cheer in the political career of Lord (Leon) Brittan. From memory, he sold the British National Oil Corporation (I’d prefer to have kept it) and let go the killers of WPC Yvonne Fletcher (I’d prefer to have kept them – and thrown away the key). Translated to Europe as a commissioner, he was big on competition, or something like that.
That said, I’ve never liked the way he is treated in (most of) the media, and the last couple of weeks have brought it all back. Quite why he should have routinely been portrayed in such an unflattering light is, of course, a complete mystery, especially, no doubt, to those right-on, anti-racist satirists who could never quite resist giving him a kick.
Finally, the year in which the National Council for Civil Liberties finally severed any connection with the Paedophile Information Exchange (PIE) – 1984 – is significant. The miners’ strike was going sideways, taking with it the notion of a radicalised working class. Middle-class leftists needed a “new proletariat” and one promising candidate for this role consisted of the nation’s children, who could now be declared, pretty much en masse, to be “vulnerable” and in need of “support”.
Better still, they were unlikely to let their benefactors down by buying their council houses and voting Tory.
With this new shift in priorities, it was bye bye PIE.
Thanks again for reading and enjoy the weekend.
Going South: Why Britain Will Have A Third World Economy By 2014, by Larry Elliott and Dan Atkinson is published by Palgrave Macmillan