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Recovery in manufacturing is no illusion

There is just no pleasing some people. Having shown positive signs for the previous three months, the latest Purchasing Managers’ Index (PMI) for manufacturing in August rose to 55.2, up from 53.3 in July. Given that any reading above 50 indicates growth, I would say that was pretty good going for an industry that was flattened by COVID-19 less than six months ago. It is worth pointing out that the rate of growth in August was the highest for six years.

However, some newspapers haven’t been able to resist implying that the latest figures were simply a reflection of factories reopening after lockdown, that the recovery was therefore some sort of illusion and that workers were still being laid off. The Times described the recovery as “mechanical”, as if it was some trick of the light or cynical distortion of the truth.

For those of us who work in the industry, it was nothing of the kind. Of course, some people have sadly lost their jobs in manufacturing, and doubtless this will continue for a while as owners struggle to remain viable after the Government’s furlough scheme runs down.

Every responsible company will be working flat out to win business but will be forced to adjust the size of their workforce and other fixed costs to match orders and customer demand. It’s called management.

I cannot speak for others, but the three operating companies that make up the UnitBirwelco Group certainly experienced their fair share of problems. Business has been slow for Birwelco, but the company is now picking up having recently won a large order. Unit Engineers and Constructors fell on hard times for two months in the early stages of lockdown but is now slowly recovering with a healthy order book for next year. By contrast, Unit Superheater Engineering did not shut down at any time, continued working on a backlog of orders, is now going well and expanding rapidly. 

This just goes to show that, contrary to the impression given by the media, not all factories were forced to close. And, if you didn’t shut down in the first place, there was no restart to lend weight to the argument that the numbers are misleading. Putting the worst possible interpretation on statistics is not helpful at this challenging time.

But let’s give some credit where it is due. The gloomsters should get back in their bunker and stay there.

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