Archive for March, 2013

You can’t prove anything with statistics!

Posted in business with tags , , on March 15, 2013 by Tom Leatherbarrow

manufacturingThe Office for National Statistics manufacturing figures released earlier this week make for dire reading, but I wonder whether there are others in the UK’s manufacturing base who are as confused as I am.

I am not for one moment saying it is easy out there, but the 1.5 per cent drop in output paints a picture of doom and gloom above and beyond what I am seeing and hearing.

Traditionally, with a drop of that magnitude the smaller players are the ones to suffer first.  But whenever I have been to visit smaller engineering subcontractors in recent months the usual response to my question about business conditions has been “busier than ever” or “flat out”.

Bigger manufacturers are going equally as well and in conversation a senior manager at one last week it was clear that frustration with the statistical acronyms, be it ONS, EEF or CBI is close to boiling over.

In fact, he made a very interesting point, namely that his sales performance used to closely track the Purchasing Manager’s Index (PMI), but that in recent years there has been a noticeable divergence.  In other words, as the PMI has gone south his sales performance has been remarkably robust.

Why is this?  I’m no statistician, but I do wonder whether the official statistics are at the same time too generic and too heavily weighted towards manufacturers supplying under-performing sectors, like construction, and insufficiently weighted towards high growth sectors like aerospace.

Perhaps, in the same way that champagne has been dropped from the Retail Price Index, one or two of the more glass half-empty purchasing managers need to be shunted off into retirement.


The Papal Conclave: my vote goes to Cardinal Collins of Toronto

Posted in PR with tags , , , , on March 13, 2013 by Tom Leatherbarrow

Cardinals Attend Final General Congregation

I got in last night just in time to see black smoke coming out of a chimney on the Sistine Chapel, signifying that the great and the good of the Catholic Church had failed to reach agreement.

It’s a tough choice, not least because it’s a tough job.  The next Pope apparently has to be God’s representative on Earth; an outstanding theologian; chief executive of a global organisation and be armed with the patience of a saint, which, apparently, he has every chance of becoming one day.

But I can’t help wonder whether the new Pope also needs better PR skills than his predecessors?

On Channel 4 News last night, Jonathan Rugman door-stepped Cardinal Thomas Collins of Toronto coming out of his hotel in Rome, cassock in hand, making his way to a taxi to take him to the conclave.

“How long do you think this is going to take?” asked Rugman.  “Well, in 1200 it took three years, they had to take the roof off wherever they were [to get the Cardinals to make a decision],” Cardinal Collins replied.  “I’d hate to do that to the Sistine Chapel; you’d wreck a lot of good art.”

Cardinal Collins made me laugh and it’s a long time since anybody in a cassock did that (not intentionally anyway!).

I turned to my wife and said.  “I’d vote for him, he seems like a nice bloke.  He’s personable, approachable, humble and can laugh at the world.  Catholicism needs somebody like that.”

As he opened the door of his own taxi, Cardinal Collins waved happily and delivered a blokish farewell to Rugman and his camera crew, “See ya guys.”

Alas Cardinal Collins is not one of the bookies’ favourites.  Apparently, the front runner is Cardinal Odilo Scherrer, a conservative with strict views on everything from contraception to what you should eat for breakfast.

He doesn’t sound like much fun does he?

So the banks won’t lend, is it time to nationalise?

Posted in Banking, business with tags , , , on March 5, 2013 by Tom Leatherbarrow

Bank lendingYesterday’s figures from the Bank of England about UK bank lending to business are shocking.

In the final quarter of 2012, despite a new government scheme, called the Funding for Lending Scheme which has given them £14 billion to encourage loans, our banks have actually managed to lend less than before.

In other words, the scheme had the opposite effect to what was intended and British business remains starved of investment cash.

Chief culprits are, incredibly, the state-owned banks, namely RBS and Lloyds HBOS.  Lloyds, which is 40%-owned by the taxpayer, cut back its lending by more than £3bn during the last quarter of 2012.  RBS reduced lending by £1.6bn.

Where has the money gone?  To rebuild bank balance sheets decimated over four years ago at the height of the financial crisis is the answer.

We have now had the sight of two successive Chancellors of the Exchequer (Darling and Osborne) and a Business Secretary (Cable) imploring our banks to lend to business.  All appeals fall on deaf ears.

What is the answer?  As Lord Lawson of Blaby, former Conservative Chancellor of the Exchequer, said recently in an article in the FT, the way forward would appear to be to turn RBS into a national business bank of the type that has been running in Germany for years.

Should we be worried about bankers voting with their feet and going abroad chasing their bonuses which would be lost with nationalisation?  Not according to Lord Lawson.  “These are not particularly impressive individuals,” he said of young bankers in the City.  ”They’re all of them easily replaced, particularly in today’s labour market.”

Amen to that!