FORECASTING the future behaviour of an economy is fraught with difficulties. There are many bodies making economic forecasts and sometimes those forecasts differ markedly. We use the monthly HM Treasury publication Forecasts for the UK Economy: a comparison of independent forecasts, as it compares 38 different forecasting bodies. The average GDP growth figure for 2010 was 2.1 per cent and the latest figures out last week show British GDP grew 0.5 per cent in the first three months of 2011.
The coalition government has accepted the need to rebalance the economy. It appears to have recognised the value of manufacturing, which has high potential for growth, particularly in export markets. There was a time when UK competition for manufacturing was located in the USA, Western Europe or Japan. Today, and increasingly, competition is truly global. Quite apart from the Bric countries (Brazil, Russia, India and China), many other nations are now rapidly industrialising and will provide intense competition. So, product excellence in concept, design and manufacture will be vital to secure the UK’s future.
The government has made some alterations to existing aid facilities to the sector, and has an understanding with the main banks about the provision of loans to small and medium-sized enterprises (SME). We need to see that SMEs, in particular, have access to finance, whether through enhanced bank lending or via the encouragement of equity finance. It’s good to see that the government now seems keen to ensure the SME sector gets access to more advice via the proposed Growth Hubs, Local Enterprise Partnerships (LEP) and the new Technology and Innovation Centres. It remains to be seen whether such initiatives make a significant difference, but manufacturing firms certainly need to start taking an interest in their local LEP to ensure that the voice of manufacturing is being heard.
Zurich has been insuring manufacturing risks in the UK for more than a century and, not surprisingly, our expertise in this area is second to none. We are conscious that manufacturing has been neglected in the UK for decades, but we’re encouraged by recent events – we just need to ensure that manufacturing remains a priority for UK plc.
For more visit: www.zurich.co.uk/expertise or speak to your insurance broker.