British manufacturing is in recession, undermining chancellor George Osborne’s forecasts of steady economic growth.
Official figures published on Tuesday of this week showed manufacturing output 0.4 percent lower in November than in October and 1.2 percent lower than a year earlier.
The figures would have been worse if it had not been for an increase in North Sea oil production in 2015 despite low oil prices. Worryingly for workers, this was a result of less maintenance taking place on rigs, and multinationals driving production at a higher rate than usual.
The machinery and equipment sector saw the biggest decline, with output down 13.7 percent over the year.
Industry accounts for 15 percent of British economic production, and the services sector is still (weakly) growing. But, as the Financial Times wrote, “With production on the slide, the UK needs an acceleration in the services sector to prevent overall growth slowing further in the fourth quarter from the 0.4 per cent rate in the third quarter.”
The global outlook underlines the “new normal” of grinding economic crisis. The Chinese stock market continued to fall at the beginning of this week, and the oil price yesterday plunged close to $30 a barrel yesterday. Eighteen months ago it was $100 a barrel.
This is a sign of the economic slowdown across the world.
RBS bank has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel.
The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the collapse of Lehman Brothers in 2008. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” it said in a client note.
Bosses and governments will step up their demands for workers and the poor to bail out the system.
But there can also be resistance.
The China Labour Bulletin reports that “The number of strikes and worker protests in China escalated dramatically towards the end of 2015 as the economy continued to stutter, with manufacturing, construction and mining all seeing a massive upsurge in disputes.”
The bulletin’s research recorded “2,774 incidents for the year as a whole, double the 1,379 incidents for 2014.”
We need many more fightbacks like the junior doctors’ strike yesterday.