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Automotive sector makes 'flying start' to 2011

17 February 2011

The Society of Motor Manufacturers and Traders (SMMT) says UK automotive manufacturing made a flying start to 2011, as new vehicle production grew 8.9% in January, despite tough economic conditions. "These encouraging figures demonstrate ongoing growth in global demand for the high quality vehicles and engines manufactured in the UK at some of the world’s leading sites,” says SMMT chief executive Paul Everitt. But he wants nobody to start resting on their laurels.

Automotive may be leading the manufacturing revival, but to ensure this positive trend continues, the SMMT calls upon government to prioritise UK manufacturing through a supportive tax system, plus sustained investment in skills, R&D and capital equipment. Ahead of the Budget in March, the SMMT is urging the Chancellor to provide R&D tax credits for small and large companies, to increase capital allowances and to reflect the sector’s importance through the business rates system.

Meanwhile, on the home front, a surprising one in three UK motorists would consider buying an electric car in the next twelve months. An online poll by the car supermarket giant, Motorpoint found that 41% of the 1,900 people who took part in the survey were impressed enough by the new generation of electric cars coming to market (Mitsubishi iMiEV and Nissan LEAF, for example) to invest in one at some point in the near future.

Motorpoint managing director, David Shelton said that while there is likely to be an initial take-up of electric cars from the so-called ‘early adopters’, to ensure mass take-up, manufacturers still urgently need to address key factors such as price, range, reliability and residual values. “These issues are likely to hold back the vast majority of people from buying an electric car in the short to medium term,” says Mr Shelton.

Exports buoying UK economy
Earlier this month, Vince Cable published his Trade and Investment White Paper, which indicated that some government support may be forthcoming for those small and medium sized enterprises (SMEs) wishing to expand their operations and pursue export markets for their products.

The Forum of Private Business (FPB), which has lobbied successive governments hard on this issue, and whose latest initiative - 'Get Britain Trading' - was launched only last week, believes the coalition is now serious about helping more SMEs to trade internationally.

The Forum says many SMEs would like to explore overseas markets but are deterred from doing so by a lack of local knowledge, language barriers and difficulties in accessing reliable and affordable information - areas that the coalition now appears ready to address.

The FPB would no doubt have been heartened to hear of the CBI's latest monthly trends survey, which shows improving demand for UK-made goods - especially from abroad. While this good news has further boosted UK manufacturers’ expectations for output growth, manufacturing firms continue to predict a sharp rise in output prices, with expectations at their strongest since July 2008.

CBI chief economic adviser, Ian McCafferty is nonetheless encouraged by the survey, particularly as firms predict further acceleration in production growth over the next quarter, supported by a strengthening in export order books.

“With expectations for output growth at their strongest since before the recession, the recovery in the manufacturing sector remains well on track, and the sector should continue to make an important contribution to broader economic growth," says Mr McCafferty. “However, there is still worrying evidence of strong inflationary pressures in the pipeline, with manufacturers once again expecting to raise prices sharply in the coming quarter. Firms’ predictions of price rises are now very close to their last peak in the summer of 2008.”

Engineering 'almost invisible' to the young
Engineering is ‘almost invisible to young people’ because of inadequate careers education and guidance, the UK’s engineering profession warned last week. Education for Engineering (E4E), a group made up of 39 UK engineering bodies, has issued a policy statement providing recommendations to government on how the careers system in England can be improved to ensure young people are fully informed about the breadth of engineering career opportunities available to them.

E4E has a good ally in John Hayes MP, Minister of State for Further Education, Skills and Lifelong Learning, who last year proposed the formation of an all-age (13yrs+) independent careers service. However, the government’s Education Bill removes the duty on schools to provide general careers education for young people and E4E believes this could reduce the number of students being aware of the opportunities engineering provides as a potential career.
The policy statement makes five recommendations to government for improving the way careers education, advice and guidance is delivered and provided in schools and colleges:

- A statutory entitlement for young people in England to receive lessons in careers education as part of Personal, Social and Health Education
- The need to demonstrate competence in the teaching of careers education as part of the professional standards for qualified teacher status
- The use of real-life science and engineering examples in lessons with careers awareness embedded in the curriculum
- Improved access to local and national labour market information for schools and colleges and closer links with local employers
- Specialist science, engineering and technology advisors in careers advisory agencies - echoing the recommendations of the careers profession taskforce

Along with these recommendations, the engineering profession is committed to working together in co-ordinated activities to support the national careers information, advice and guidance services.

BAE Systems chairman, Dick Olver, who also chairs E4E, remarked that young people often do not make the connection between the mobile phones they use or the computer game consoles they play on a daily basis and the engineers who created them.

“We need to better inform our children and young adults about the value of engineering and the exciting career opportunities an engineering background can afford,” he says. “Better careers education in schools and an improved professional independent careers service, that advises young people of the many routes into engineering will improve this situation. We must make sure that young people are fully informed about the exciting opportunities afforded by a career in engineering so that we will be able to meet the growing needs of our industries as we continue to re-balance the economy.”

Les Hunt
Editor
 


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