Time to make amends by restoring trust in economy

Dip in manufacturing has led to a contraction at start of the year that the chancellor must turn around, says James Moore

- James Moore

Britain’s makers and metal-bashers are not in a happy place. Manufacturing might be small when compared to Britain’s dominant service sector but it still counts. This brings us to the latest official figures, showing that the economy caught a winter cold and decided to stay in bed in January after December’s surprisingly sprightly performance.

To be fair, no one was expecting much. The regular Reuters poll of economists anticipated an expansion of 0.1 per cent. But the fact that UK plc did the opposite, contracting by the same number, will still come as a major disappointment to a government that has put growth above all but is struggling to find it with any consistency.

The dominant service sector more or less held up, inching forward with growth of 0.1 per cent, but the makers’ mucked up the numbers, recording a 0.9 per cent decline. With construction also falling (0.2 per cent), Britain’s economic hokey-cokey – two steps forwards, two steps back – continues.

Here’s where it gets really unpleasant. The first quarter economic survey from Make UK, the manufacturers’ trade body, comes out on Monday – and I understand that the figures will be very weak, with both orders and output in the red. What makes this stand out is that the first quarter of the year is usually a good one for the sector. The last time it was in a trough was back in 2016, nearly a decade ago.