Manufacturing output: Keep calm
Grainne Gilmore
Surprise rise in output fuels hope worst is over
Not long ago, Alistair Darling came under fire for being too optimistic in suggesting that there could be a recovery before Christmas. But now he, along with senior Bank of England figures are doing all they can to dampen excitement over the green shoots that seem to be sprouting in every corner of the economy.
Today’s figures showing that manufacturing output rose for the second month in a row in April is a further sign that UK factories could be through the worst. Likewise the encouraging figures showing that imports rose by 2 per cent in April raise hopes that UK consumer demand is holding up. But despite this, Kate Barker, a member of the Bank’s rate-setting committee, was quoted as saying this morning: “Some areas of retailing are still doing reasonably well and manufacturing orders are starting to come back, but whether that’s a stocking issue or a turn-up in final demand isn’t so clear. I think there’s a lot of concern about what’s going to happen beyond this pick-up.”
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This was echoed by a spokesman for Gordon Brown who reacted to this morning’s upbeat figures by saying “But this remains a very difficult global economic situation and there are absolutely no grounds for complacency.” It seems policymakers are determined not to even consider counting their chickens until the economic upturn is well and truly hatched.
Halfords on the right track
Marcus Leroux
Halfords forecasts profits rise to £92.4m
It would be too easy to draw a line between the implosion of the motor industry and the performance of Halfords. If car sales are plummeting – new registrations were down 25 per cent in May – surely sales of the various accoutrements for which Halfords is famous will have taken a hit?
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Not on today’s evidence. True, like-for-like sales fell by a modest 3.3 per cent, but profit and revenue both increased.
The retailer’s sales mix provides natural stabilisers. If people are veering away from splashing out on new cars, fancy alloys or cutting-edge sat-navs, then they are likely to be spending more patching up their old cars. So while Halfords’ enhancements are suffering its maintenance is growing.
But the strategy of David Wild, chief executive, has also insulated it against the worst of the recession. He has targeted cycling as a big opportunity – it is, afterall, a trend that benefits from economic difficulties, ride-to-work schemes and the growing concern over obesity.
It is winning plaudits even among serious cyclists for its top-end bikes, particularly its Boardman series, designed by former Olympic gold medallist Chris Boardman. Halfords has also introduced a “click and collect” service, which makes intuitive sense for an audience that is inherently mobile.
The management is also tip-toeing into eastern Europe. The auto industry may be on the road to hell, but Halfords at least is on the right track.