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

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6 times government ministers have contradicted each other over Brexit

Getting your line straight is slightly more complex than a moon landing. 

“No deal is better than a bad deal,” Theresa May told Jeremy Paxman during the 2017 general election campaign. Almost exactly two months on, her Chancellor, Philip Hammond, has declared the UK will seek a transitional deal that could last three years.

Hammond’s comments come a day after government ministers contradicted themselves over when free movement could end. “Strong and stable”, the Tory campaign slogan, has gone the way of Labour’s Ed Stone. 

Here’s a selection of times government ministers have contradicted each other over Brexit.

1. Free movement

Brandon Lewis vs Amber Rudd and Michael Gove

The immigration minister Brandon Lewis declared on 27 July that a new immigration system would be in place from the spring of 2019.

But his departmental boss, the home secretary Amber Rudd, said the same day that there would be an “implementation period” while the flow of EU workers continued and there would be no cliff edge.

Meanwhile, environment secretary Michael Gove and non-expert Brexiteer said days earlier that there was likely to be a transitional period where free movement continued for two years.

2. Chlorinated chicken

Michael Gove vs Liam Fox

One question emerging from discussion of a potential UK-US trade deal was whether chlorine-washed chicken would be allowed into British supermarkets. The international trade secretary Liam Fox said such chicken was “perfectly safe”.

He may not have been round to Michael Gove’s recently for dinner, then. The environment secretary said he opposed the import of chlorine-washed chicken and that “we are not going to dilute our high food-safety standards” in pursuit of “any trade deal”. 

3. Moon landings

David Davis vs Liam Fox

In June, Brexit secretary David Davis suggested the negotiations to leave the EU were more complicated than landing on the moon.

His fellow Brexiteer Liam Fox, on the other hand, said in July that a future UK-EU trade deal should be “the easiest in human history”. Then again, maybe he just has a different definition of easy.

4. Single market and customs union

David Davis vs Philip Hammond

Perhaps one reason the Brexit secretary is finding it so tricky is that on 27 June he told a conference he plans to leave the single market and customs union by March 2019

But the Chancellor, aka the Mopper Up of Economic Mess, stressed Britain was heading down a “smooth and orderly path”. 

5. EU army

Michael Fallon vs Boris Johnson

In 2016, fresh from a Leave campaign which warned of the dangers of an EU army, foreign secretary Boris Johnson voiced his support for… an EU army.

Defence secretary Michael Fallon, though, had previously said the UK would continue to resist any rival to Nato. 

6. The migration cap

Theresa May vs David Davis and Philip Hammond

As home secretary, Theresa May defended the net migration cap, an idea the Tories thought up while in opposition, even though in practice it was widely criticised and never met. Even though, according to the George Osborne-edited Evening Standard, none of her colleagues privately back the target, it has stayed under her premiership. 

Some ministers have publicly questioned it as well. As early as March, Davis said immigration might go up after the UK leaves the EU.  In June, Hammond said the system for businesses recruiting foreign workers would not be more “onerous” than it is at present. 

(You can see all the ministers in the Brexit government that have realised reducing immigration might be a problem for them here)

 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.