Mixed report for compressed air industry
July 01st 2010 Chris Dee, executive director of the British Compressed Air Society (BCAS) presents his Business Report for AirUser 2010
UK new car sales rose 10.8% in June compared with the same month last year, industry figures have shown, despite the end of the scrappage scheme.
The Society of Motor Manufacturers and Traders (SMMT) said 195,226 new cars were sold in June, adding that the performance was "above expectations".
June registrations were boosted by a rise of more than 25% in fleet sales, suggesting an improved confidence in the future from business and the need to replace vehicles that have been retained longer than they would once have been. The UK construction industry will not start to recover from the recession until 2011, according to a report. The study, by the Construction Skills Network, says the industry will see a slow return to growth over the next few years after a ‘severe’ contraction.
Output fell by 13% last year, with particularly sharp falls in north-west England, the north-east and West Midlands. The report says that 375,000 jobs will have been lost in the industry by 2011.
Only about 100,000 of those jobs, it says, will be recouped by 2014. Construction output in the next few years is forecast to be strongest in Wales, Scotland, eastern England and the East Midlands. The recession has hit the construction industry ‘extremely hard’, according to Mark Farrar, chief executive of the Construction Skills Network.
"This situation remains fragile and we are concerned that, given the scale of the public sector deficit, potential funding cuts in the period ahead will further exacerbate the loss of skills before private sector investment has fully recovered.”
Industrial production in the 16 countries that use the euro increased for the third consecutive month in May. Eurostat, the EU's statistics office, said production climbed by 0.9% from the previous month, the same as the increase seen in April. However, economists had forecast a rise of 1.2%.
Eurozone manufacturers have benefited from the lower value of the euro, as this makes their goods cheaper in countries outside the bloc. This has helped manufacturers play a key role in dragging the EU out of recession The best news in today's labour market figures is that the economy created a lot more jobs than it lost in the three months to May. Employment rose by 160,000 - the largest rise in nearly four years.
The Bank of England has rightly been concerned about rising inflation expectations. But even if people are expecting prices to rise at a higher rate than in the past, there is little evidence in these figures that workers can expect higher pay to compensate. And, lest we forget, the squeeze from higher taxes and lower public spending has barely begun.
Year on year, overall production output in May 2010 was 2.6% higher than in May 2009. In May 2010, output in the mining and quarrying sector decreased by 1.9% compared to the same month a year ago with a 2.7% decrease in oil and gas extraction. Over the same period, output of the energy supply industries fell by 3.1% with decreases in electricity supply and water supply output.
From the BCAS Statistics for sales of compressed air ancillary Equipment and service, the graph generated from the Distributor members of BCAS show a comparable profile to that from the ONS Furthermore, the sales of Industrial Compressors into the UK as reported by BCAS Manufacturer members also show a similar profile suggesting that the sharp fall in orders has eased and the first signs of a recovery can be seen.
However, the sales of reciprocating compressors continues to fall as can be seen in this summary of sales in the UK as reported by BCAS Manufacturer members: To summarise: output of the production industries has increased by 1.0 per cent in the latest quarter. Within production, manufacturing output increased by 1.4% and utilities output increased by 0.4%, but mining and quarrying output fell by 0.5%.
Construction output fell by 1.6%, revised down from a fall of 0.5% in the previous estimate.
All eyes are now on next year and at the time of writing we are still considering the effects of Chancellor George Osborn’s June budget and the economic impact from the cuts announced. The International Monetary Fund (IMF) has downgraded its forecast for both the UK and the Eurozone and we will have to see the possible impact of synchronised austerity measures being implemented around Europe.
Whatever lays ahead, BCAS remains confident that its members will be better prepared and capable of meeting the challenges throughout 2011 and providing value for money service to the UK compressed air user. More articles from British Compressed Air Society (BCAS): | 
