You know that things are bad when your online news source can't look you in the eye. Even the mighty Germans are facing recession, as the ZEW Institute’s gauge of investor expectations about Europe’s largest economy has sunk to its lowest level since 2011. In the land of the Audi and the Neff there are dire inflation forecasts and warnings that an end to Russian energy supplies would force Berlin to ration gas supplies for heavy industrial users.
Five and a half thousand miles away, Chinese figures showed a slowdown in manufacturing, weakness in retail sales, lower property investment and a big drop in new construction yesterday (Monday 15 August). This led to a dip in oil prices, as weaker economic data from China drove a commodities sell-off. One day on and the price of industrial metals, such as copper, also fell after Chinese figures showed a slowdown in manufacturing, weakness in retail sales, lower property investment and a big drop in new construction.
Back at home, the Office for National Statistics published official labour market figures, revealing a 5.1 per cent average weekly pay growth, including bonuses, in the three months to June, dropping further behind rising inflation and down from 6.2 per cent in the prior three-month period. With inflation at 9.4 per cent and in a lift heading up, pesky 'real pay' is dropping like a stone, marking the fastest rate of real pay decline in over 20 years.
So how on God's planet, with misery seeping over us like a global cloud, groceries costing households about £533 more this year as inflation in supermarkets hits its highest level in more than a decade and Ryan Giggs todger being announced as weightier than his brain (not that it's particularly big. Allegedly, according to thousands of women he has cheated on thousands of other women with), were more than 90 new businesses created every hour in the UK in the first half of this year, analysis of Companies House data has found.
Despite the difficult economic climate, more than 402,000 businesses were registered between January and June, an increase of 18 per cent on the same period a year earlier. This almost inexplicable rise in entrepreneurship sits alongside an increase in the number of workers switching jobs in 2022. The number of them rose to a record high of 997,000 during the first quarter. According to the Office for National Statistics, who have had a busy week so far, a high proportion of that was driven by resignations rather than redundancies, suggesting workers may be quitting to set up new businesses.
Some of these are selling grass which is much greener now than it was previously on their side of the fence. If they are sensible they would have sold ice cream (sales of that increased by 18 per cent last month) and mineral water (sales of that were up 23 per cent in July). What they shouldn't do is set up in competition to CT Automotive, which designs and supplies interior trim and parts including air conditioning grilles, armrests, storage compartments, cup-holders, docking stations and gearstick surrounds for folk such as Nissan.
The board of CT said yesterday that the state of the skilled labour market and galloping inflation meant the plant was no longer viable. A very glum looking executive said: “Inflationary cost pressures and a shortage of labour have led to the group’s UK manufacturing facility becoming lossmaking.” UK manufacturing operations are ceasing, with the loss of about 70 jobs.