Triple-dip fears prompt calls for policy shift
14 Mar 2013
London - The UK economy is facing a return to recession following a 0.3% contraction at the end of 2012, the latest Office for National Statistics (ONS) figures show.
The Index of Production from the ONS also showed that manufacturing fell by 1.5% compared to last month and 3.0% compared with January 2012.
The worse-than-expected figures confirms a widely held view that the UK need a radical shift in government policy to better support its industrial manufacturing and engineering sectors.
Trade union Unite, for instance, described the latest manufacturing output figures as a warning that a triple dip recession is a genuine threat to the economy.
“These figures should serve as a warning to George Osborne that his forthcoming budget must be a game-changer for Britain’s economy,” said Unite assistant general secretary Tony Burke.
“As part of the budget, Britain needs a strategic manufacturing plan, but the government seems a long way off from developing one. At present the government’s ‘cross your fingers and hope for the best’ strategy is predictably failing. Britain needs a massive boost and a strategic plan to power the country out of the doldrums.”
The latest fall in manufacturing and industrial output came as no surprise given that the economy is at best flat and at worst heading for a triple-dip recession, notes Chris Coopey, head of manufacturing at MacIntyre Hudson Association (MHA) – a UK association of independent accountants and business advisers
There is however an interesting contrast between the sector’s recent performance and the up-beat predictions on growth for 2013 from SMEs in the industry, he notes.
“SMEs in the manufacturing and engineering sector were recently surveyed and remain buoyant about continued growth in 2013,” said Coopey.
A recent MHA survey revealed that around 75% of manufacturers who took part in the survey are predicting growth during 2013 with more than 30% predicting growth of more than 10%.
The disappointing manufacturing figures do illustrate the fact that there will be no rebalancing of the economy without a radical shift in government policy for the manufacturing and engineering sector, believes Coopey
“Whilst there are positive policies from government there is no overall strategy that will help effect the step change we need in our ability to manufacture and export,” he said.
“What has already been done can help to make small incremental differences to the sector, but to really achieve a rebalancing of the economy a massive investment of time, and I’m afraid to say money, needs to be made.
“[This] is the only way we can attain the fundamental shift in attitudes in government, in the banks and in our schools, colleges and universities- which will in the long term see a British manufacturing renaissance.”