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Has the UK economy turned the corner?

By Hamish Champ
Posted 5 February 2013

There are faint signs – although signs nonetheless – that the UK economy is veering away from total meltdown.

Data from the latest Markit/CIPS UK Services PMI Index suggests that areas such as hotels and restaurants, computing and IT and what are colloquially known as ‘personal services’ traded well in the first month of the year.

This has led various experts to hail a recovery of sorts might be under way, since the size of the UK services sector relative to that of the overall economy means when that it improves everything starts looking up – and vice versa.

I suppose it will only require an alternative take on the country’s economic performance to send the experts into a tizzy again, but at least the data appears to be reflecting what we at PRW hear on the ground a lot of the time, namely that things aren’t as bad as are being made out in certain quarters of the media.

Of course no-one is denying there is still a long way to go in terms of the UK's economic recovery. Manufacturing is performing relatively well, although the blip remains construction.

A growing concern at the moment is sterling's recent fall against the euro, which has made things particularly tricky for a number of operators in the UK plastics sector, not least material distributors and their processing customer base.

Suppliers face making tough decisions about whether to pass on all, some or none of the resulting increases in raw material prices to their customers.

I suspect few will pass the whole lot on, with others looking to assuage what price increases are put through with something to soften the blow.

It is times like these that supplier/customer relationships truly come into their own.

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