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Insights into uk manufacturing - the real economy

Good news, bad news

Jeegar Kakkad June 18, 2009 13:21

That's what we're likely to get from the data in the coming months, mixed signs of the state of the economy. One day the recovery will be around the corner, the next it will have suffered a setback. 

And what does that mean about the underlying health of the economy?

Nothing profound, but that we're simply in a recession with so many economic forces pulling the economy in different directions, that finding a single driving trend will be difficult.

So after last week's good news on the economy (stabilising business surveys and house prices), this week brings a fall in retail sales, less credit for businesses and households and industrial trends stagnating yet again.

The most worrying news, however, comes from oil prices - which are on the up - and earnings - which are still falling. The tension between the two suggests that consumer spending could fall further, weighing on any recovery. And that's despite the money being pumped in to the economy by the Bank of England.

And the outlook abroad isn't much better. Industrial production continued to slump in the US and China's growth looks to be driven by stockpiling rather than a geniune turnaround.

So we're back where we started: more mixed news on the economy.

The only real conclusion is that a sustained recovery hasn't taken root.

 

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