In Focus: Reading the runes
Trying to interpret data to use as the basis of a theory on current economic trends is a tricky business. Not least of all because various surveys and pieces of research at both the national and international level seem to contradict each other.
I used to think the best job in the world - other than international talent scout at Aston Villa during Martin O’Neill’s reign - was to be either an economist or a weather forecaster. Both careers seem to allow people to be wrong on a regular basis without sanction.
I still feel like that about weather forecasters, but I think the job of in-house economist has lost its appeal a bit. Companies can’t really afford for them to be wrong at the moment and giving your boss the right steer based on the mixed signals we are receiving at present can’t be easy.
Even at the regional level things are unclear. To take some positive news first. Business conditions in the region's private sector economy continued to improve during August, according to the latest survey in the West Midlands Purchasing Managers Index (PMI), sponsored by regional development agency Advantage West Midlands (AWM).
Philip Amison, director of strategy at AWM, said: “August’s PMI data reports further robust growth in business activity and new orders in the West Midlands, both at rates faster than the UK average. However, the figures also show an easing in the pace of growth seen in recent months, a trend starting to emerge across a range of economic data.”
Before the touch on the brake at the end of that quote, it all seemed to be going rather well.
Further good news came from the employment figures released this week which showed a rise in the people in work in the West Midlands. However, the increase was dismissed as something of a false dawn by Will Rogers, policy adviser at Birmingham Chamber Group, who suggests the rise in employment may be primarily down to economically inactive people, such as students, finding work, rather than unemployed people getting jobs.
“West Midlands companies may not be strong enough to compensate for the 600,000 public sector jobs expected to go over the next five years. There are 636,900 public sector jobs in our region, which is 27 per cent of the total,” he said. “If local authorities were to cut at least 20 per cent of their budgets, we could be looking at approximately 127,380 jobs being lost in the region.”
It seems to me that what we have is a certain amount of encouraging news but, hovering over that like the spaceship in Close Encounters of the Third Kind, is the fear of much worse news to come, especially in the government’s spending review in October.
My prediction is that the inertia that has been present in the economy for much of this year will remain for another month and then we’ll know whether we’re on our way to a double dip recession or whether the bad news has been capped at a lower level than expected and we can all look to the future with, if not exactly confidence, then at least a measure of reassurance.
If there’s one thing we could all do with at the moment it’s a bit of certainty.
Recent Posts
Services
Dealmakers Services Directory
Directory Find an advisor to help you buy, sell or invest
Property Services Directory
Find an advisor across property services
Commercial Property Finder
Full commercial property listings in the Midlands
Guides
Midlands City View
The news, features and analysis that matter for your city
International Trade
Our guide provides expert analysis on a range of trade destinations
42 under 42 Members
The latest class of the Midlands brightest young business people
- Contact us
- Midlands
- North West
- South West
- Wales
- Yorkshire
- Other regions
- 0121 232 0980
- 0161 907 9711
- 0117 906 5900
- 02920 434500
- 0113 220 4410
- 0161 907 9718
- Insider regions
- Central & East
- Ireland
- Midlands
- North East
- North West
- South East
- South West
- Wales
- Yorkshire