Boom in the gloom for capital goods

Amidst stagnation, there's one ray of hope

Up on the month and still down on the year. Today’s UK production figures (from the ONS) can be taken either way. Stagnation after a brief and half-hearted recovery really does seem to be the conclusion as manufacturing output has seen three month on month rises in the last six months, and three falls. Total production output has been weaker than manufacturing (two-thirds of the total) for months due to the dismal performance from the North Sea but the annual decline in May is, at least, the least negative since September last year.

UK Index of Production from Timetric

The striking trend in the last couple of years has been the rise in the output of capital goods. The reason for this strength is not entirely clear other than to make the relative comparison, namely to point to the well-known weaknesses in consumer demand and mining (mainly North Sea oil) output. Until one of those two sectors picks up, there is little chance of a real recovery.

UK Index of Production from Timetric

Manufatcuring output is divided into a number of components. The chart below shows the strongest and weakest of the 13 sub-sectors in the recovery phase, post-2008. Output of transport, electrical and other equipment has grown strongly while wood, computing and basic pharmaceuticals have experienced no recovery at all.

Originally posted at Timetric.com

An oil rig. Energy is one of the flagging sectors. Photograph: Getty Images

Simon is the vice president (product) at Timetric

Dan Kitwood/Getty
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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.