Intelligence Briefing - 15 January 2010

Published: 15/01/2010

EEF's weekly briefing on the issues affecting manufacturers including our new report 'Economic Prospects 2010', as well as our regular round up of how we are representing manufacturers and the latest economic indicators.

EEF holds latest event in our Future of Manufacturing programme

The barriers to growth for UK manufacturers were discussed this week at an EEF event hosted by Caterpillar. Chaired by EEF’s Stephen Radley, our panel consisted of Robert Droogleever, Caterpillar; David Bramwell, Quality Furniture Company; and Patrick Keen from the East Midlands Development Agency. Discussion focused on problems accessing finance, infrastructure concerns and the skills system and image of manufacturing.

For further information, contact Stephen Radley, Director of Policy and External Affairs, sradley@eef.org.uk

Sectoral Social Dialogue Committee for European Manufacturing Launched

At a meeting addressed by Robert Verrue, the Director General of DG Employment, a formal Sectoral Social Dialogue Committee (SSDC) for the European manufacturing has been launched between CEEMET (the European employers’ organisation to which EEF belongs) and the European Metalworkers Federation (EMF). This SSDC aims to help employers and trade unions work together on issues of mutual concern at European level, but its decisions will not be binding. It has established two ad-hoc Working Groups on “Education and Training” and “Competitiveness and Employment in a Globalised Economy” with EEF staff participating in the latter.

For further information about this CEEMET/EMF SSDC, contact David Yeandle, EEF Head of Employment Policy, dyeandle@eef.org.uk

EEF responds to skills inquiry

EEF this week submitted written evidence to the House of Commons Business, Innovation and Skills Select Committee’s inquiry into the new Skills Funding Agency and new arrangements for publicly-funded training. We made the case for simplification to be embedded in the new system, and highlighted the uncertainty which could arise from the proposed new role for Regional Development Agencies in skills policy.

If you would like a copy of the submission please contact Nigel Fletcher, EEF Skills Adviser, nfletcher@eef.org.uk


In the news

EEF has achieved substantial press coverage since the turn of the year across a wide variety of topics. Our Manufacturing Advantage report was the lead business story in The Times and was followed by a major feature in The Sunday Times the weekend afterwards. We have also led calls for an urgent review of energy issues, especially gas storage, in the wake of supplies being cut off to some companies. Our reaction was on the front page of the Financial Times , followed a few days later by their lead letter . A wider feature on energy in The Observer also contained our comments. Also this week we released our Economic Prospects report for this year (see below) which was featured heavily in The Times and Guardian . Finally we responded to the announcement of an RBS Investment Fund for manufacturers, in The Independent.


Weekly focus

Prospects for 2010

Last year was a record year, but not for the right reasons. As 2009 ended, the UK was emerging from one of the longest and deepest recessions in post-war history. EEF’s latest report – Economic Prospects 2010 – takes a look at how economic conditions are likely to unfold over the next 12 months.

In 2010, the UK economy faces a daunting rebuilding task, as the foundations of growth must be broadened to begin addressing twin budget and trade deficits. The UK's economic prospects in 2010 will therefore by determined by the extent to which business investment, consumer spending and export-driven growth can mitigate the pain of the adjustment. Our central forecast implies that, as with previous recessions, profits and investment will be slow to recover. And an export-led recovery, on the back of a stronger world economy, holds out the best prospect for growth this year. But risks and uncertainties abound; from continued fragility in the banking sector and a global recovery that fails to gain traction to the possibility of a sharper consumer retrenchment and the complexities that the electoral will add.

For manufacturing for most sectors the next 12 months will inevitably be better than the past 12. Manufacturing will return to growth and much like the rest of the economy, manufacturing faces a weak start to the year. Uncertainty about the strength of the recovery, coupled with the end of stimulus measures will curtail investment and production in the first quarter. The slow start to the year will mask wide sectoral variations, with some already showing signs of a turnaround in demand, while other are just starting to feel the effects of the downturn


Week in review

UK trade

The UK trade deficit narrowed in November and exports for manufactured goods edged higher for the third consecutive month.

Index of production

Manufacturing output was broadly flat in November for the third month running. There were falls in metals and mechanical equipment, offset by some growth in other transport and electrical equipment. The figures were consistent with some growth in 2009q4. EEF’s latest forecasts point to 1.2% growth in 2010.


The week ahead

Tuesday 19th: Inflation
Wednesday 20th: Labour market statistics; MPC minutes
Friday 22nd: Retail sales


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