Still a long way from recovery
Two new pieces of news suggest we’re still in the doldrums. Firstly, yesterday’s monthly figures for new car sales from the Society for Motor Manufacturers and Traders showed that new car registrations in July were 3.5% lower than they had been a year before. This is the 13th successive monthly fall and sales in the year-to-date are 6.7% down on last year. The only growth area is in fleet sales, which were up 2% – a reminder that many businesses are sitting on a pile of cash.
The other worry was today’s insolvency statistics. Most of the coverage of these figures has been positive, because they are well down on last year’s. But I’m worried that the figures for both individual insolvencies and company liquidations is still significantly higher than it was pre-recession and what’s been happening over the past 18 months looks far more like stagnation than recovery:
Our recovery is very sluggish because domestic demand is so subdued. The government is right to emphasise exports, but when the only source of demand comes from other countries there’s a strategic danger that is becoming more and more apparent.