At
the beginning of 2015, I believe that the new year heralds much better
prospects for the surface finishing industry and the manufacturing sector as a
whole than any of the past seven years, since the world went into recession in
2008.
There
are two items of news that are significant for me at this time. The first one
concerns the inevitable correction that’s taking place in the fortunes of some
of our giant retailers. The problems at Tesco have been well-documented and
they have begun 2015 by announcing 43 store closures and other major
cost-cutting measures. Marks & Spencer has also announced poor trading
figures, Morrison’s has said goodbye to its CEO and even Sainsbury’s has
suffered a downturn.
After
years of inexorable growth, we are finally witnessing a levelling out of the
prospects of the great retail juggernauts that have dominated our economy for
over two decades. At the same time, it has been reported that new car sales
rose to more than 2.47 million in 2014 – the highest level for over ten years.
As
many of these cars are manufactured in Britain, from the low cost Nissan
vehicles in the North East to the luxury Bentley models in Crewe, we are
producing new cars in record numbers. Indeed, it was significant that the cargo
ship that ran aground off Southampton over the new year contained over 1200
cars and commercial vehicles, including Jaguars, Land Rovers, Minis and JCBs!
Is
this a sign that we are finally seeing the rebalancing of our economy towards
production and away from consumption? The answer is a tentative ‘yes’, but
tempered by the fact that we are still running a current account deficit at 6%
of GDP. We have not had a larger gap between what we earn and what we have to
pay to the rest of the world since 1948, so there is still a long way to go.
Nevertheless,
the UK economy as a whole grew by 2.6% in 2014 and is forecast to grow by a
further 2.4% in 2015. Unemployment is set to fall below 5.5% this year and
wage inflation is finally overtaking general inflation, so the outlook is encouraging.
In
four months’ time there is a general election, one for which the outcome is
looking more uncertain than at any election since 1974. And yet, I don’t
believe that this uncertainty will necessarily harm our economic prospects.
After all, Germany has been governed by broad coalitions for as long as anyone
can remember and it hasn’t done them any harm.
This
is because their politicians of all persuasions have always been focussed on
the importance of science, engineering and manufacturing, and when the going
has got tough, they have always had the ability to export their way out of
trouble.
We
can also draw a parallel with the USA. For most of the past six years, the
Obama administration has been paralysed by deadlock in the Senate and Congress.
Despite this, the economy has been ticking over perfectly well and is now
outgrowing even China and India.
So,
for all of us in the UK surface finishing industry, my advice is this. Look
overseas as far as possible for your future business prospects. Take advantage
of the government grants available through the Chambers of Commerce for capital
investment, consultancy, business development and marketing.
Support
our excellent UK manufacturers of process equipment and consumables. Utilise
the resources of our first class trade associations, the SEA and IMF for
technical support and business advice. Above all, be confident that the growth
in manufacturing will inevitably feed into opportunities for product finishing
services as the year progresses.
Finally,
a happy new year to you all, and I look forward to doing plenty of business
with you in 2015!
