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Tuesday, 8 September 2009

Spinning like a top

The BBC spin machine is switched on again, saying UK manufacturing output rose at its fastest rate in 18 months in July, helped by a sharp pick up in car production, official figures show.

Better still the the Office for National Statistics said factory output rose by 0.9% from June, three times what analysts had forecast! Wow.

Except that putting it into perspective that uptick may be nothing more than a correction after a deep cut in manufacturing as dealers cleared their inventories. That plus a litle bit of an unsustainable push from cash for clunkers, which has pushed up car manufacturing by 14%, but when that's gone it's gone, and if anything all that may even have brought forward some car purchases giving a larger fall off when it stops.

The 0.9% uptick in the production index from 88.9 to 89.6 comes after a 15% fall between in the 12 months from February 2008 to February 2009, so current UK manufacturing production is still 14% below where it was 18 months ago.

Funnily the BBC described the 15% plunge as a "dip" in output, whereas the 0.9% growth is described in glowing terms. No lack of objectivity there, then.

Do you see that little blip on the right hand side of the graph? You are there. That is the latest "good news". So if you think that when GDP starts trending upwards we will be back where we were two years ago, think again.

2 comments:

Uncle Bob said...

Depressing isn't it?

Alex said...

Perhaps it would help if you just thought of it as "refreshingly honest".