Green shoots all over the place this morning: BMW has given the UK auto industry a boost by deciding to build its two new Mini models at its Oxford factory, potentially creating thousands of jobs; Kenexa’s latest survey on employee confidence found a near-5% rise during the second quarter; and the latest survey from the Chartered Institute of Purchasing & Supply show that growth in the services sector hit a two-year high in August – suggesting that firms are starting to plan for the recovery. It’s almost enough to make us feel all warm and fuzzy about our economic prospects – if we didn’t have the likes of Hays to bring us back down to earth with a bump...
Let’s start with the good stuff: BMW said today that it plans to build two new Mini models at its plant in Oxfordshire – some rare good news for the British car industry, after a year of unremitting gloom. BMW hasn’t forgotten about its homeland – it’s investing nearly £1bn back in Germany too – but it’s decided against basing its new production line somewhere cheaper (we wonder if the Government helped ‘talk’ them into that?). One of the cars will be a new coupe (a fairly ugly thing, in our humble opinion – it looks like a normal Mini that’s gone under a low bridge too fast), while the other one will be unveiled later this month. If a whole new assembly line is needed (the factory’s already operating close to capacity) this could create thousands of jobs.
There was also positive news from the services sector, where activity rose for a fourth successive month in August – and at the fastest rate since September 2007. Since this covers about 40% of the UK economy, that’s good news; CIPS chief exec David Noble admitted that much of this growth was due to heavy discounting, but it still suggests the economy might be back on an upward trajectory. Or at least it would do, were it not for the fact that the CIPS result doesn’t seem to tally with the official statistics. And it’s also worth remembering that this week’s manufacturing figures were actually worse than expected.
The Mini news also needs to put in context. Recruiter Hays released its latest results today, and they paint a pretty grim picture of the jobs market: its profits dived 43% in the last 12 months, with permanent recruitment fee income down nearly 30%. Chief exec Alistair Cox, (who recently spoke to MT about the management challenges he’s faced at Hays: see here and here) described it as ‘the most challenging [year] on record’. And times are still pretty tough – he reckons unemployment is likely to keep rising for at least a year after the recession ends. Not many green shoots to be seen there...
In today's bulletin:
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Mini green shoots after jobs and activity boost
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