Good morning and welcome to this week’s Friday Brief.
Its been a busy week in Westminster with the publication of the long awaited White Paper on Brexit. Some of the things that the MTA has been arguing for were included, notably a commitment to avoid costly divergence in product regulations and a scheme to enable people (like service engineers) to work across borders. But it’s important to remember that this is only the first stage in a negotiating position; we will be discussing Brexit for years to come (oh the joy of it…). The MTA’s Head of External Affairs, Paul O’Donnell, has written a quick take in the article below.
Elsewhere the trade climate seems to be darkening with the Trump administration’s imposition of tariffs. Orgalime, the European umbrella body for mechanical engineering, of which the MTA is part, has issued a call on the EU not to escalate in haste – which it fears could damage long term links with the US. You can read about it below.
Much more positively, MTA member Group Rhodes is celebrating relocating to new premises on Calder Vale, Wakefield in a move, supported by Leeds City Region LEP, which is creating 21 new jobs. The new site is only half a mile from where the business was founded in 1824 and represents a significant investment by the company in the future of the area.
Over at the AMRC’s Factory 2050 a team from the Integrated Manufacturing Group has been putting an upgraded 3D optical scanner – a Hexagon Blaze 600A - through its paces to see how it can improve shop floor productivity for the automotive and aerospace industries. The new system enables scanning to take place without costly surface preparation – saving time and money. You can find out more below.
Before we turn to the economic news for this week, a quick reminder that the Business Survey is right on deadline so please take the time to complete it if you haven’t already.
The main economic news this week is the latest manufacturing output data, which suggests something of a mixed picture for the key customers of MTA members, a picture which is complicated by revisions and re-basing of the data which has changed some of the recent history. Therefore, although Aerospace set a new record level for output in May, the previous trend which had been almost continually upward, now has a little dip in the earlier months of 2018. Similarly, whilst it remains high in historical terms, output of the Automotive industry is now on a clearly downward trend, although this does not entirely match up with the SMMT figures, especially for engines where output continues to expand. The equivalent European data is equally volatile on a month-by-month basis, but the underlying trend looks to be positive; however, it appears that the pace of growth in output for capital goods is easing on the short-term trend, although it is still the fastest growing sub-sector compared to this time last year.
Our reports on other economic data this week includes a look at the ONS’s new monthly GDP data which suggests some recovery in activity from the start of the year, although it is probably well below the long-term trend for the economy. The Bank of England’s Agents still have a positive view of the manufacturing sector, whilst noting a subtle shift in the strength of this from exports to domestic customers; they report that capacity utilisation is still high and investment intentions are above normal. Finally this week, investment activity in the Euro-zone edged up in the 1st quarter of 2018, but profitability eased a little.
That’s all for this week, enjoy the sunshine and try not to think about what could have been in the football.