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On Sunday, April 7, 2024, The Telegraph‘s economics correspondent Liam Halligan, who, sadly, recently left GB News, told us ‘For good economic news, the Tories have an obvious choice’ (emphases mine):
Yes, I know there’s a cost of living crisis, and the airwaves are filled with seemingly endless doom and gloom. But over the last week and more, we’re seen quite a bit of relatively upbeat economic news.
During the second half of 2023, of course, the British economy fell into recession. GDP shrank 0.1pc during the three months from June to August, followed by a further 0.3pc drop during the final quarter of last year.
That’s two successive quarters of economic contraction – the technical definition of recession – the first the UK has seen, outside of lockdown, since the aftermath of the 2009 global financial crisis.
Despite the second-half shrinkage, Britain’s GDP did grow during 2023 as a whole – albeit by just 0.1pc. And there are now clear signs the economy began to recover in early January – with the latest survey data suggesting that economic expansion, however tentative, continued into February and March.
Official data (which may yet be revised) point to GDP growth of 0.2pc during January, boosted in part by buoyant post-Christmas retail sales. On top of that, an influential survey of business opinion last week indicated our main three economic sectors all grew in March – the first time that has happened since June 2022.
What’s most striking is that UK manufacturing just returned to growth for the first time in 20 months, with production and new orders picking up following prolonged contraction.
The latest purchasing managers index (PMI) survey of business leaders across the manufacturing sector rose to a better-than-expected 50.3 in March, up from 47.5 in February – with readings of 50 or more signalling economic growth. The survey also found other signs of stabilisation, with falls in manufacturing employment and purchasing activity “slowing sharply”.
Almost three in five UK manufacturers now expect their output to rise over the coming year – the highest since mid-2022, despite ongoing concerns about relatively weak export demand and continued supply-chain stresses.
This relative positivity among manufacturers, despite demand for UK exports falling for the 26th successive month, suggests business leaders now sense a homegrown recovery.
He reports positive news in the service and construction sectors, too.
Halligan contrasts this with the Eurozone:
The latest manufacturing PMI across the 19-nation eurozone was just 46.1 last month, deep in sub-growth territory.
The reading among German industrialists was a truly ghastly 41.6 in March, down from 42.5 the month before – as the European Union’s largest economy, having weaned itself off sanctioned Russian gas, continues to suffer from high energy costs.
The EU, in fact, has been the main drag on overseas demand for UK manufacturing exports, at a time when ongoing hostilities at the mouth of the Red Sea have impacted supplies of Asia-sourced components heading for both UK and EU manufacturers.
Conservative MPs, especially government ministers doing the daily media rounds, would do well to focus on this optimism rather than falling into the media/Labour trap of continuing doom and gloom.
This is the way that elections are won.
Forbidden Bible Verses will appear this week
Churchmouse Campanologist 