THE SWAN OF TUONELA
17th March, 2008
Related News: News
There was a thought provoking editorial in this morning's Manufacturingtalk newsletter. Indeed, I think there have been a fair few of these of late, from Mike Page the editor. This month, he wrote, on the subject of the UK's manufacturing economy:
"Ever listen to the piece of classical music, 'The Swan of Tuonela', Op.22 No 2 by Jean Sibelius? The scene pictured in the music is that of a contented swan gliding on the surface of a beautiful, placid lake, while all the evils of hell are busy in the lake's depths. One could make a comparison with the UK's manufacturing industry riding on a buoyant market, while the service industry, sub-prime bank lending difficulties, credit squeezes, declining services fortunes and other ills, which are festering below, may soon grab manufacturing and pull it down with them! Only a thought! "The UK's Confederation of British Industry (CBI) reported at the end of February, 2008, that manufacturers were having the 'longest run of sustained demand for 12 years'. The CBI reported that orders were making their strongest showing since 1995 and that a big influence was the growing demand for capital goods. Also, the minor slowing in manufacturing demand in the UK could be offset by support from a weakening Pound Sterling - particularly against the Euro."
I would be inclined to agree with the second paragraph I've quoted here. I have a number of clients reporting booms; with one showing 100% growth in the last year and another so busy they are building a new plant. However, I've not convinced of the dangers to manufacturing mentioned in the first paragraph. The sub prime lending incident is a structural problem in the economy; it doesn't necessarily mean business is in the doldrums. The service economy is another matter, I'm unsure about my position on this. Certainly lending is continuing to rise indicating spending is still up. Furthermore, in our corner of the world, where only techy engineering related things really matter, service is booming alongside manufacturing.
Overall, the economy is a little nervous, but there are certainly reasons to be confident this year. I suspect that as in the opera, our swan will continue to safely swim on the surface. I for one am not talking myself into recession for the time being.