Chance of triple-dip falls on strong UK manufacturing

Eurozone contraction continues.

Markit economics has released PMIs for manufacturing across Europe, offering a snapshot of the state of the sector. It remains in ill-health, but the general picture is of a bottoming-out — it may still be shrinking, but the rate of decline is slowing.

(Standard explanation: PMIs, purchasing managers indices, are based on interviews with purchasing managers in various sectors. They aim to determine the level of activity in those sectors, and present them on a scale where 50 is equal to no change in activity, over 50 means increasing activity, and under 50 means decreasing activity. The indexes are not official measures of activity, but are generally extremely accurate predictors)

Spain enters its 21st straight month with a PMI under 50, but it is steadily rising; the reduction in new orders is slowest since June 2011. It's not good news — it's not even a turning point — but it's less bad news than there has been for a while.


Spanish manufacturing index

A similar story is evident in Italy; again, the manufacturing PMI hit a ten-month high [47.8 up from 46.7], but continued to imply contraction in the sector. While the fall in new orders tapered off, though, the pace of job cuts increased, though Markit reports that, anecdotally, the main reason seems to be non-replacement of voluntary leavers. That's about as good as contraction gets.


Italian manufacturing index

France is the darkest spot in the releases. The index fell to 42.9, indicating rapid contraction, and has been below 50 since the summer of 2011. New orders fell even faster — the sharpest rate since the great recession four years ago — and Markit's Jack Kennedy notes that it "suggests further steep falls in output are likely".


French manufacturing index

Conversly — and demonstrating again the split fortunes that we discussed last year — data for the UK demonstrates mild expansion. A PMI of 50.8, down from 51.2, is not ideal in what is still supposed the rapid upswing as we come out of a recession, but it does hint at continued strength in the sector. More importantly, it calms fears that we may be heading for a triple dip recession.

The rise in domestic manufacturing comes mainly from the continued strength of the consumer goods sector — and is partially offset by a contraction in investment goods. While in the short term the economy doesn't "care" which of those spending is focused on, if manufacturing of investment goods continues to shrink, as it has for the last six months barring a brief spike over the winter, then the hangover will be painful when that lack of investment bites.


UK manufacturing index

George Osborne inspects some manufacturing. More of it is happening now than before. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Aussies and Kiwis can be “us” to Brexiteers - so why are EU citizens “them”?

Nostalgia for the empire means Brexiteers still see Australians and New Zealanders as "Brits abroad". 

There are many terrible things about Brexit, most of which I counted, mournfully, on the night of the referendum while hiding in a stairwell because I was too depressed to talk to anyone at the party I’d just run away from. But one of the biggest didn’t hit me until the next day, when I met a friend and (I’m aware how ridiculous this may sound) suddenly remembered she was Dutch. She has been here 20 years, her entire adult life, and it’s not that I thought she was British exactly; I’d just stopped noticing she was foreign.

Except now, post-referendum, she very definitely was and her right to remain in Britain was suddenly up for grabs. Eleven months on, the government has yet to clarify the matter for any of Britain’s three million European residents. For some reason, ministers seem to think this is OK.

If you attended a British university in the past 20 years, work in the NHS or the City – or have done almost anything, in large parts of the country – you’ll know people like this: Europeans who have made their lives here, launching careers, settling down with partners, all on the assumption that Britain was part of the EU and so they were as secure here as those with British passports. The referendum has changed all that. Our friends and neighbours are now bargaining chips, and while we may not think of them as foreigners, our leaders are determined to treat them as such. People we thought of as “us” have somehow been recast as “them”.

There’s a problem with bringing notions of “us” and “them” into politics (actually, there are many, which seems like a very good reason not to do it, but let’s focus on one): not everyone puts the boundary between them in the same place. Take the Tory MEP Daniel Hannan. The sort of man one can imagine spent boyhood afternoons copying out Magna Carta for fun, Hannan spent decades campaigning for Brexit. Yet he’s not averse to all forms of international co-operation, and in his spare time he’s an enthusiastic advocate of CANZUK, a sort of Commonwealth-on-steroids in which there would be free movement ­between Canada, Australia, New Zealand and the UK.

When pushed on the reasons this entirely theoretical union is OK, when the real, existing one we’re already in isn’t, he has generally pointed to things such as shared language, culture and war memorials. But the subtext, occasionally made text by less subtle commentators, is that, unlike those Continentals, natives of the other Anglo countries aren’t really foreign. An Australian who’s never set foot in Britain can be “us”; the German doctor who’s been here two decades is still “them”.

There’s a funny thing about Hannan, which I wouldn’t make a big thing of, except it seems to apply to a number of other prominent Leave and CANZUK advocates: for one so fixated on British culture and identity, he grew up a very long way from Britain. He spent his early years in Peru, on his family’s farm near Lima, or occasionally on another one in Bolivia. (You know how it is.) That’s not to say he never set foot in Britain, of course: he was sent here for school.

His bosom pal Douglas Carswell, who is currently unemployed but has in the past found work as both a Conservative and a Ukip MP, had a similarly exotic upbringing. He spent his childhood in Uganda, where his parents were doctors, before boarding at Charterhouse. Then there’s Boris Johnson who, despite being the most ostentatiously British character since John Bull, was born in New York and spent the early years of his life in New England. Until recently, indeed, he held US citizenship; he gave it up last year, ostensibly to show his loyalty to Britain, though this is one of those times where the details of an answer feel less revealing than the fact that he needed to provide one. Oh and Boris went to boarding school, too, of course.

None of these childhoods would look out of place if you read in a biography that it had happened in the 1890s, so perhaps it’s not surprising that they instilled in all of their victims a form of imperial nostalgia. I don’t mean that the Brexiteers were raised to believe they had a moral duty to go around the world nicking other people’s countries (though who knows what the masters really teach them at Eton). Rather, by viewing their homeland from a distance, they grew up thinking of it as a land of hope and glory, rather than the depressing, beige place of white dog poo and industrial strife that 1970s Britain was.

Seen through this lens, much of the more delusional Brexiteer thinking suddenly makes sense. Of course they need us more than we need them; of course they’ll queue up to do trade deals. Even Johnson’s habit of quoting bits of Latin like an Oxford don who’s had a stroke feels like harking back to empire: not to the Roman empire itself (he’s more of a late republican) but to the British one, where such references marked you out as ruling class.

There’s another side effect of this attitude. It enables a belief in a sort of British diaspora: people who are British by virtue of ancestry and ideology no matter how far from these shores they happen to live. In the 19th century, Australians and Canadians were just Brits who happened to be living abroad. What Britain absolutely wasn’t, however, was just another European country. So, in the Leavers’ minds, Aussies and Kiwis still get to be us. The millions of Europeans who have made Britain their home are still, unfortunately, them.

I’m sure these men bear Britain’s European citizens no ill-will; they have, however, fought for a policy that has left them in limbo for 11 months with no end in sight. But that’s the thing about Brexiteers, isn’t it? They may live among us – but they don’t share our values.

Jonn Elledge is the editor of CityMetric

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

This article first appeared in the 18 May 2017 issue of the New Statesman, Age of Lies

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