UK manufacturers report strongest export growth since late 2014 - BCC

Thrugelmir

Some good news.

British manufacturers reported the fastest export growth in more than two years in early 2017 and the services sector also recovered to rack up its strongest sales growth since last June's Brexit vote, a business survey showed on Thursday.

The British Chambers of Commerce, which runs Britain's largest quarterly private-sector business survey, said firms reported a robust short-run outlook.

But there was much more uncertainty about the medium term as well as fears of sharply rising costs.

British manufacturers reported the fastest export growth in more than two years in early 2017 and the services sector also recovered to rack up its strongest sales growth since last June's Brexit vote, a business survey showed on Thursday.

The British Chambers of Commerce, which runs Britain's largest quarterly private-sector business survey, said firms reported a robust short-run outlook.

But there was much more uncertainty about the medium term as well as fears of sharply rising costs.

http://uk.reuters.com/article/uk-britain-economy-idUKKBN17E2XM

davomcdave

Thrugelmir wrote: »

Some good news.



http://uk.reuters.com/article/uk-britain-economy-idUKKBN17E2XM

This is what happens when your currency falls. Locals can no longer afford to compete with foreigners to buy product so it's sold abroad. Exports rise, imports fall, foreigners' standards of living rise and locals' standards of living fall.

The currency markets' response to Brexit has made every Briton poorer.

Carl31

davomcdave wrote: »

This is what happens when your currency falls. Locals can no longer afford to compete with foreigners to buy product so it's sold abroad. Exports rise, imports fall, foreigners' standards of living rise and locals' standards of living fall.

The currency markets' response to Brexit has made every Briton poorer.

Our product's have not become more expensive locally, they have just become cheaper for foreign companies

Imports fall as local products become the cheaper alternative, so locals benefit . The consumer may have to pay a bit more for local products though,which might affect demand a bit

Tromking

davomcdave wrote: »

This is what happens when your currency falls. Locals can no longer afford to compete with foreigners to buy product so it's sold abroad. Exports rise, imports fall, foreigners' standards of living rise and locals' standards of living fall.

The currency markets' response to Brexit has made every Briton poorer.

Overly negative Remainer spin from you there IMO.
I thought export driven growth and ergo the re-balancing of economy was the holy grail for countless Chancellors of the Exchequer in the past?
Perhaps you prefer a consumers on credit driven economy?

Thrugelmir

davomcdave wrote: »

This is what happens when your currency falls. Locals can no longer afford to compete with foreigners to buy product so it's sold abroad. Exports rise, imports fall, foreigners' standards of living rise and locals' standards of living fall.

The currency markets' response to Brexit has made every Briton poorer.

The UK has a considerable balance of trade deficit. There's only so much of value that can be sold to fund it. Companies, Office Buildings, ports, airports etc.

We are getting poorer. To become richer we need to work harder and save more.

davomcdave

Tromking wrote: »

Overly negative Remainer spin from you there IMO.
I thought export driven growth and ergo the re-balancing of economy was the holy grail for countless Chancellors of the Exchequer in the past?
Perhaps you prefer a consumers on credit driven economy?

Carl31 wrote: »

Our product's have not become more expensive locally, they have just become cheaper for foreign companies

Imports fall as local products become the cheaper alternative, so locals benefit . The consumer may have to pay a bit more for local products though,which might affect demand a bit

Thrugelmir wrote: »

The UK has a considerable balance of trade deficit. There's only so much of value that can be sold to fund it. Companies, Office Buildings, ports, airports etc.

We are getting poorer. To become richer we need to work harder and save more.

So much squealing!

When Chancellors of the Exchequer talk about export-led recoveries (it always seems to be recoveries) what they are really describing is British industry becoming more efficient and thus undercutting not-British companies. As that basically hasn't happened since the 1860s they are talking what economists that are of a euphemistic nature call bull dust.

What has happened in this case is the pound has fallen in value therefore British people can't afford to buy as many imports and foreigners can afford to buy more British traded goods and services. You have gotten poorer and foreigners have gotten richer. It doesn't matter how many times you call me a Remainer talking the country down it's what is actually happening. The changes in prices is just simple arithmetic and the results are borne out in the data.

That I believe the UK should stay in the EU doesn't automatically make me wrong about everything else.

Squeal.

Thrugelmir

davomcdave wrote: »

That I believe the UK should stay in the EU doesn't automatically make me wrong about everything else.

Squeal.

We are not discussing Brexit though, but the state of the UK economy. Related but distinctly different matters. Poor trading performance has been the case for many years.

What has happened in this case is the pound has fallen in value therefore British people can't afford to buy as many imports and foreigners can afford to buy more British traded goods and services. You have gotten poorer and foreigners have gotten richer.

A very narrow understanding of broader economic issues. As at the very least people need to earn money to afford to buy imports.

davomcdave

Thrugelmir wrote: »

We are not discussing Brexit though, but the state of the UK economy. Related but distinctly different matters. Poor trading performance has been the case for many years.

The night that the Brexit vote was counted the pound fell by 10% and more. Correlation isn't causation but it's a hell of a coincidence.

I agree that British industry has performed poorly for a long time, 150 years in my opinion, however the UK remains one of the top 10 biggest economies and exporters in the world so perhaps not doing so badly despite being so badly hamstrung by the EU. Imagine where the UK will be in 20 years having been freed from the single market and the obligation to serve all those rich European customers.

Thrugelmir wrote: »

A very narrow understanding of broader economic issues. As at the very least people need to earn money to afford to buy imports.

Feel free to educate me.

AIUI, the Pound fell by a lot so that made imports more expensive because maths and made exports cheaper because maths. That meant British people couldn't afford to buy as many imports because maths and not-British people could afford to buy more exports because maths.

As someone that tries to take a scientific approach to life I am always happy to be shown to be wrong as that means I'm learning. Please show me how my opinion is wrong.

Emoji

Cheap oil
Every none oil revenue based economy is doing well at the moment not just the UK

Thrugelmir

davomcdave wrote: »

The night that the Brexit vote was counted the pound fell by 10% and more. Correlation isn't causation but it's a hell of a coincidence.

For balance. As far from being a new discussion.


Published: 17 Oct 2016

Was the pound overvalued before the EU referendum?

It’s correct that the IMF has said that in 2015 the pound was overvalued. But it’s open to debate whether it’s undervalued right now.

Having an exchange rate that’s too high can be a problem. In particular, it makes it cheap to import foreign goods (which are priced in cheap foreign currencies) and hard to sell exports (which are priced in expensive sterling). A country may end up buying much more than it sells abroad, as the UK does.

In February, the International Monetary Fund said the sterling was overvalued by somewhere between 5% and 15% in 2015. Just before the referendum, the IMF put the over-valuation slightly higher, saying that sterling was overvalued by between 5% and 20% in 2015. Other experts, like the former governor of the Bank of England and the IMF, have agreed that sterling was overvalued.

On 14 October, the effective exchange rate was 18% below the average for 2015. That’s the value of sterling compared to a range of other currencies used by the UK’s most important trading partners. If nothing had changed since the IMF’s recommendations were made, it could mean sterling was now undervalued.

But other things have changed.

When the IMF made these judgements it assumed the UK would vote to remain in the EU. In the IMF’s view, the value of the pound might need to be even lower now that the UK has voted to leave.

That’s because leaving the EU single market would mean other countries would put tariffs (taxes) on imports from the UK. Higher tariffs would make imports from the UK more expensive and so other countries would be less inclined to buy them. To make up for this, the value of sterling would have to fall even further to keep the price of UK exports low.

So right now it’s hard to say whether the value of the pound has dropped lower than what the IMF would recommend. Since no-one knows what kind of trade relationships the UK will have once it leaves the EU, opinions on the UK’s long-term potential for trade or the best exchange rate for sterling are open to debate.

https://fullfact.org/economy/exchange-rates-and-imf/

A_Medium_Size_Jock

davomcdave wrote: »

Feel free to educate me.

AIUI, the Pound fell by a lot so that made imports more expensive because maths and made exports cheaper because maths. That meant British people couldn't afford to buy as many imports because maths and not-British people could afford to buy more exports because maths.

As someone that tries to take a scientific approach to life I am always happy to be shown to be wrong as that means I'm learning. Please show me how my opinion is wrong.

I saw you post in another thread that you are an economist.
Which IMHO explains a lot.

I am not being rude but tell us how many supposedly noted economists foresaw 2008?
How about the bursting of the .com bubble in 2000?
You state regarding the devaluation of the GB£ - yet this was widely realised to be overvalued for a variety of reasons well before our referendum; as an economist why do you not acknowledge that?

So, on to your question as to how your opinion may be wrong.

You consider only a narrow range from amongst a huge amount of variables. Below are just a few examples to start you off:

Imports are indeed generally more expensive as a result of falling £.
China's Yuan though also devalued although admittedly not by as much; as an economist, tell us by how much over the last two years?
Since China is one of (if not the) largest importers into the UK has this Chinese Yuan devaluation then not mitigated much of this GB£ devaluation?

Where are these increased exports of ours coming from; does each employee now produce more?
Are there more employees to produce what is exported?
Either way, does increased produce being exported not equate to increased income - and does increased income not equate to greater disposable income?
And so more money to spend, whether it be on imports or on anything else.

If you want to suggest that increased exports equate to decreased sales at home, figures so far do not equate that into fact.
Also there may well be other reasons behind a retail slowdown - not least the continual dire warnings in UK media.

Also one I have posted before elsewhere; the effect on our economy of being amongst the top countries in the world:

The World Bank estimates migrant workers sent back about $24.9bn last year, making Britain the fourth-largest source of remittances in the world.

https://www.ft.com/content/3b3f1bee-63bc-11e6-a08a-c7ac04ef00aa

No I am not suggesting a ban on sending such funds, or being anti-migrant.
But you cannot deny the possibility that (just as one example) training our own doctors instead of importing from abroad would eventually lead to a lesser sum being sent out of our country - and thereby improve our economy.


So there are just a few brief examples of just what a broad spectrum the UK economy comprises.
There is so much more besides the issue of cheaper exports and more expensive imports.



ETA - from the above re: the IMF.
Much to consider and much I agree with, tempered however with the fact that the IMF is already recognised as being pro-EU biased.
Their forecasts are frequently incorrect - and by some degree.
Then there is their MD, Christine Lagarde.
Convicted of "negligence" only last year for misdeeds during her time as French Finance minister.