Happy New Year – or is it?

It’s really terrific to be able to report on some good news, especially at the beginning of the New Year. And the good news is, of course, that the UK manufacturing industry now appears to be brushing off the recessionary dust that has choked it over the past few years.

That’s right. According to many good people in the know, new orders, output and employment are all on the increase, and if they continue to head in that direction, it looks as if UK manufacturing could be all set for a significant revival this year.

That’s the good news. Yet as pleased as I am to hear such magnificent reports from those who follow our manufacturing industries, I think it’s important to temper such enthusiasm with a dose of reality.

Because unlike the economic revivals of the past, in which the individuals that worked for such companies saw the benefits of their efforts rewarded by significant pay increases, I for one don’t think that this new manufacturing renaissance is likely to result in the same sort of outcome.

Sadly, despite the fact that many companies might be heading towards greater profitability once again, the folks that work for them are unlikely to see any immediate financial remuneration as their managers take a cautious wait-and-see approach to ensure that the revival is simply no more than a blip.

Indeed, even those employees who are lucky enough to actually get a pay rise in line with inflation this year will see increases in Value Added Tax eat at more of their wages, rail rises rob them silly, increasing utility bills bite harder at their bank accounts, and college tuition fees virtually bankrupt them as they scramble to fund their children’s education.

That’s right. The manufacturing economy might well be on the up and up, but many of those that work within it will be unlikely to see much of a real benefit – at least not this year. Instead, many folks will simply watch as their income is effectively reduced. That’s the bad news.

Hopefully, however, the pain in our pocketbooks will only last for a year or so until the government puts its economic house in order and the country returns to a stable financial condition. Then, once profligate government spending has been brought under control, personal taxes can be lowered and companies will open their wallets to reward their long-suffering employees once more.

But like Harrison Ford’s character Han Solo from the original Star Wars films, I’ve got a bad feeling about this, at least in the short term.

What worries me more than anything is that if the economic power houses in the Far East continue to dominate the global manufacturing marketplace for goods, we might find ourselves being trapped in a state of financial austerity for years to come. Unless, of course, we can figure out a way to increase the amount of the UK’s Gross Domestic Product from our own excellent manufacturing base.

Happy New Year.

Dave Wilson

The Wilson’s world blog also forms part of the Engineeringtalk, Electronicstalk and Manufacturingtalk newsletters. To subscribe, go here for Engineeringtalk, here for Electronicstalk and here for Manufacturingtalk.