A liitle bit of good news on the UK economy.

[Fred Bloggs]

I was talking today to a smallish firm that makes customised air conditioning plant for large offices, hospitals, hotels etc.... Since the £ has melted against the Euro they are bombed out with work for Spain. Apparently, until very recently they'd never won a contract in Spain before. OK, it won't save the UK economy single handedly but at least there might just be a glimmer of hope. I have also heard that Worley Parsons in Brentford are starting a big job in January for Kazakhstan. Maybe there's a faint glimmer of hope there for us.....?

[DiscoStu]

I was talking today to a smallish firm that makes customised air conditioning plant for large offices, hospitals, hotels etc.... Since the £ has melted against the Euro they are bombed out with work for Spain. Apparently, until very recently they'd never won a contract in Spain before. OK, it won't save the UK economy single handedly but at least there might just be a glimmer of hope. I have also heard that Worley Parsons in Brentford are starting a big job in January for Kazakhstan. Maybe there's a faint glimmer of hope there for us.....?

Any luck the £ will devalue so much it'll be cheaper to offshore to the UK instead of an Indian code/sweat shop and we'll all be deluged with work

[Fred Bloggs]

Any luck the £ will devalue so much it'll be cheaper to offshore to the UK instead of an Indian code/sweat shop and we'll all be deluged with work

Maybe. Pound in your pocket etc.....

[PAH]

Any luck the £ will devalue so much it'll be cheaper to offshore to the UK instead of an Indian code/sweat shop and we'll all be deluged with work

I like it.

The added bonus is that only those with plenty of money will be able to afford to go on holiday abroad. No more brits abroad wearing football shirts. I cringe when I see them. So classy.

[Turion]

Faqqing great that. On a global scale we have to become 30% poorer so that the few tin pot companies left that make anything here, can sell it abroad. Won't take long before a bit of inflation erodes that dubious advantage.

[Cliphead]

Well it's good for my Plan B. We are launching in the US before anywhere else mainly because the NAMM show in Los Angeles is the place to launch new products (next month).

Some potential US customers have had a sneak preview already and placed orders with more orders coming in by the day, we expect to sell out the first batch by the end of january. Now gearing up for full scale production.

[VectraMan]

Client Co. is a manufacturing company that sell all over the world. So it's good for them, although offset to some degree by the parts they import costing more.

Should be beneficial to Plan B Co. too.

Boomed!

Shame all the pounds being earned aren't worth anything.

[Stan.goodvibes]

Shame all the pounds being earned aren't worth anything.

Not so. Your pound is worth as much as it was yesterday - just not against foreign currencies, which isn't a problem until you need to spend pounds overseas. Nows the time to hold onto your pounds until things improve - in fact invest your squids in the UK.

Living in an export-orientated country I can assure you a big drop in your currency is the best thing that can happen to you. Our NZ economy always picks up when the dollar goes low. It has the following benefits:-
1. exporters earn more
2. people will buy more UK-made products as they start to be competitively priced against foreign-made goods
3. people pay for services in the UK instead of abroad i.e. outsourcing to India does actually start to become less viable.

Of course raw materials from overseas are now costing you more, so firms have to be more efficient when manufacturing, but its a great time to invest in onshore mining and local technologies like wind farms etc because anything onshore becomes more competitive as the pound goes down.

Getting back to the currency - the eurozone is looking fragile at the moment - in this uncertain financial environment its not inconceivable that the pound will suddenly gain favour over the euro and before you know its all swung the other way. However it wouild be better for the Uk if that doesn't happen for a year or two...

[Purple Dalek]

Client Co. is a manufacturing company that sell all over the world. So it's good for them, although offset to some degree by the parts they import costing more.

Should be beneficial to Plan B Co. too.

Boomed!

Shame all the pounds being earned aren't worth anything.

Spot on there. In the long forgotten past, when the currency dropped, then imported 'raw materials' became more expensive, but this didn't matter too much as the value add of our manufacturing absorbed it. The problem this time is that many manufacturers import 'sub-assemblies', hence a component of the value add has to be paid for at an adverse exchange rate, hence the absorption of cost that occurred previously is no longer there as our value add is so much lower.

So, for a short while, (and quite short as many companies now practice JIT,) companies will be able to offer at a lower price, but when it comes time to restock their prices will have to increase, substantially.

In a small way this has already been apparent, a colleague was looking to buy a camera from Amazon. They spent a little while thinking on it. Went back a few days later just to see the price had increased 25%.

Remember it is different this time.

[Fred Bloggs]

Like the firm I mentioned. They buy sub assemblies from Germany and Italy in Euros. They engineer and package the final product in the UK and then ship it to France or Spain to their customers. I guess that if they're switched on to this then they'll have a Euro account so that the French/Spanish customers pay in Euros and the UK firm I'm talking about then pays their German/Italian supplier in Euro's, the net effect on them would be zero. But, since their "added value" and their profit is in £'s then their profit margin has increased allowing them to trim their Euro prices as the £ has sank. Hence they win a lot more work. I guess that's how it works???