It would be fair to say that things have not been easy for UK-based plastic suppliers over recent years. Indeed, demand for acrylic plastic and other manufacturing resources dipped to deeply worrying levels after the banking crisis of 2007 and during subsequent recessions. For the first time in what seems like a long time however, suppliers of nylon, acrylic and engineering plastics now seem to have genuine cause to start feeling optimistic again.
So why is this?
Well, on the back of some already very promising statistics recorded earlier this year, recently released figures have shown that Britain’s manufacturers ramped up production in September, thereby helping to fan the flames of optimism surrounding a possible industrial renaissance.
Earlier this week, The Office for National Statistics (ONS) announced that manufacturing output increased by a better than expected 1.2% in September (reversing the 1.2% drop a month earlier). The ONS said the relatively strong performance from manufacturing meant industrial production increased by 0.6% during the third quarter of the year; slightly higher than the 0.5% recorded in the first estimate of third-quarter GDP last month. Expert analysts believe the figures suggest manufacturing is continuing to recover from the worrying decline observed during the great recession of 2008-09
Lee Hopley, chief economist of the manufacturers’ group the EEF, responded to the figures by saying: ‘There were strong gains in pharmaceuticals, electronics and transport, with the latter benefiting from a combination of new products, solid overseas demand and longer order books. With signs pointing to firm activity in the final months of this year, our forecasts suggest that the second half of the year will be the strongest six-month period for the sector in three years.’
On a slightly more cautious note, HSBC’s Simon Wells questioned where all the extra products being churned out by manufacturers were going to go. He said: ‘The rapid pace of recovery raises the question as to where all the output is going. In the three months to August, UK goods exports contracted by 1.5% while industrial production rose 1.1%. This suggests output is being consumed domestically. Inventories or investment could be rising fast but given the fiscal consolidation and falling real wages, we continue to be surprised by the pace of recovery.’
However Wells did admit that he thought the latest figures, together with a run of strong recent surveys from across the economy, would probably be impressive enough to prompt the Bank of England to increase its growth forecast when it presents its quarterly inflation report next week.
The bigger picture
In its latest assessment of the economy published last week, Consultancy PwC said it expects GDP growth to pick up steadily, from 1.4% this year to 2.4% in 2014. PwC’s chief economist John Hawksworth said ‘After a couple of sluggish years in 2011 and 2012, the UK economy is showing clear signs of recovery this year and is now gathering real momentum.’
Cause for optimism indeed!
About the author – Bo Heamyan blogs regularly about the ups and downs of the economy, and and has written extensively about the many benefits plastic suppliers provide to the nation for a number of industry leading companies, including AIinternational.co.uk.