Figures from March have shown that output from UK manufacturing is still decreasing; however, these falls were not as bad as was previously expected.

According to figures from the Office for National Statistics (ONS) in the first quarter of this year, output declined by 5.5% compared with the three months previously. This is the worst fall since 1948.

Though in comparison, March’s output was only down by 0.1%, its smallest fall in 13 months.

The ONS figures also showed that the UK’s trade deficit contracted to £2.5 billion in March, compared to £2.8 billion in February – better than was expected.

Trade Getting Better, Or Worse?

An economist at BNP Paribas said: “The trade deficit is much better than expected for a second consecutive month.

“We’ve already seen the impact of the weaker pound on inflation, now we are starting to see the benefit in terms of a narrower trade deficit.”

The reason behind the narrow deficit is due to imports falling faster than exports as the weak UK economy reduced demand.

The wider measure of industrial production (which also includes energy supply, mining and oil and gas) fell by 0.6% in March compared to February. This would make the annual fall 12.4% - the biggest since 1968.

Downturn May Not Be Over

However, analysts are seeing this as a positive outcome: “The industrial production figures are significantly better than expected and the February fall was revised sharply upward,” said the chief economist at Investec.

“All in all, fairly positive data for the UK economy this morning.”

However, EEF – a manufacturers organisation- is saying that things are still quite bad in some areas.

Their chief economist Stephen Radley said: “It is too early to say that the downturn in manufacturing is over.

Skills Base At Risk

“While the overall figures say that the downturn in manufacturing is declining more slowly, the rate of contraction is still severe in some industries and trade volumes are still weak.”

According to the British Chamber of Commerce (BCC), the manufacturing downturn is still a threat to the UKs skills.

Their chief economist, David Kern said: “Although many firms are viable and productive, they face considerable risk to their skills base.

Unless the government takes further specific action to help manufacturers maintain these precious skilled jobs, the sector and the wider UK economy will suffer,” he added.

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From October the Government has announced that minimum wage for over 21s will be raised from its current rate of £5.73 to £5.80 an hour.

For any employees between 18-21, the wage will also be raised by 6 pence to £4.83, and for 16-17 year olds wages should be increased by 4p to £3.57.

This comes a year after statutory hourly rates were increased by 21p an hour even though business leaders have recently asked that minimum wage be kept at its current level to compensate for the economic problems the country is currently facing.

The government believes that almost a million people will benefit from the increase in October, as it also announces that from October, the adult statutory minimum wage will apply to 21 year olds, as opposed to the current system that groups 21 year olds with those that are 18, 19 and 20.

Business Secretary Lord Mandelson says: “The Low Pay Commission (LPC) has carefully examined the latest economic data before making their recommendations on the minimum wage rate, balancing the needs of workers and businesses in the current economic climate.

“The government agrees with this assessment and has accepted the recommendations for these new rates to take effect in October.”

“These are very challenging times for the UK and unprecedented economic circumstances for the minimum wage,” added George Bain – chairman of the LPC.

“We believe that the Low Pay Commission’s recommendations are appropriate for this economic climate. They reflect the need to protect low-paid workers’ jobs as well as their earnings.”

Mixed Feelings

The Director General of the BBC added: “We pressed for a freeze to the minimum wage because of the severity of the downturn and the daily loss of jobs.

“We are pleased that the increase is only a modest one, and it shows that the Low Pay Commission and the government have largely understood the seriousness of the situation. However, a freeze would have been more help to businesses.”

The general secretary of the union Unison however, has opposing views: “We think it should be increased by more than 7p an hour because it is hardly going to help low-paid workers pay the bills.”

John Cridland of the CBI said: “This moderate increase recognises that many businesses are struggling, and helps protect jobs at a time of rising unemployment.

“Over the past decade the minimum wage has risen faster than average earnings and inflation, and a sensible, cautious approach now will help ensure this landmark piece of legislation continues to improve the lives of low paid workers for many years to come.”

The news of the increase also comes shortly after the government announced that from October employers were not allowed to use tips and service charges as a ‘top up’ of their employees’ wages in order to meet the minimum wage requirements.

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The last major electricity company, British Gas, has finally cut its electricity prices by 10%.

The cut comes into effect immediately, saving around 4.5 million customers who have standard tariffs and pre-pay meters, an average of £43 each year.

The majority of the biggest countries cut their prices by 10% in February, meaning that more than 7 million customers benefitted.

According to a consumer group however, prices should be cut even lower as wholesale energy costs have halved.

This cut still puts electricity at a higher cost than the beginning of last year, due to the company putting up their prices by 26% in total in 2008.

The managing director of British Gas has said: “The price of electricity on the wholesale markets has been falling and we’ve always said British Gas will do what we can to lower prices when we can.

“Today British Gas customers are paying less for their electricity than they were two years ago.”

Wholesale Peaks Months Ago

E.On, EDF Energy, Scottish Southern, Scottish Power and Npower all started providing their customers with cheaper prices back in March, making British Gas the last major company to change by a couple of months.

Regulator Ofgem said that wholesale prices for energy peaked back in December last year.

Energy expert for Consumer Focus, Robert Hammond, said: “We would have expected much bigger reductions considering that wholesale gas and electricity prices are half what they were at their peak last year.

“This again raises the question of whether wholesale price cuts are being fairly passed on to consumers.”

Some consumers are complaining that energy companies are too hasty to increase their prices, but reluctant to bring them back down again. However, Ofgem are saying that they will continue to monitor the situation, but that there is no evidence to prove that this is so.

Analysts believe that energy prices will be reduced further by British Gas later in the year.

Price Wars To Begin?

The director of the price comparison site Energyhelpline said: “British Gas now has the cheapest standard tariff for dual fuel customers.

“Other suppliers will hate this and we expect them to retaliate soon with price cuts of their own.”

However, it is also predicted that any cost cuts will be temporary as wholesale prices are expected to rise again next year.

“Prices for the period from winter 2010 onwards have either been stable or on the increase because of the unexpected economic recovery,” said Dr Lowrey of the Energy Information Centre.

“Suppliers have been given some headroom to reduce retail prices in the short term,” he added, saying that there was a good possibility that they would go up again in about 18 months time.

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Mexico has written to the World Trade Organisation (WTO) asking for countries that have restricted their imports over swine flu for an explanation.

Gerardo Ruiz Mateos is the Economy Minister and said that bans like this lacked a basis in science and therefore won’t be permitted.

Russia, China and many other countries have banned all pork products and pigs from Mexico since the outbreak of Swine Flu, which has so far claimed 30 lives, and caused nearly 1,500 people to be infected.

But the World Health Organisation is urging all countries to remain on the lookout, saying that a global pandemic is still a possibility.

The organisation has shipped 2.4 million anti-flu treatments donated by a manufacturer in Roche to what it considers to be the 72 countries ‘most in need’, including to Mexico itself.

Normal life is only just returning in Mexico after everywhere recently shut-up-shop. Traffic is returning to the streets, some bars are re-opening and schools and universities are set to re-open on Thursday.

What’s Happening Around the Globe?

In China – bans have been extended on pork products to over 17 US states. There are now36 states banned.

China has also had many Mexicans flown home on specially chartered planes. These are among 70 people that the country has confined even though only one has the virus, sparking a diplomatic argument between Mexico and China.

The UK is distributing specially-produced advice leaflets on swine flu and how to prevent its spread.

According to Mr Ruiz Mateos, he has sent a complaint to the WTO about eight countries that have banned Mexican imports because the constrictions lack a scientific reasoning. He identifies China, Russia, the UAE, Ukraine, Bolivia and Ecuador as some of those putting bans on their exports

The restrictions put in place are in line with the rating that WHO give swine flu – five – meaning a pandemic is ‘imminent’.

‘Unjustified’?

At a news conference Mr Ruiz Mateos said: “We won’t permit unjustified barriers on Mexican exports,” claiming that the counties he had named were not among Mexico’s biggest traders, though those with larger amounts of trade with the country usually have also taken measures to reduce the countries produce.

The countries Finance Minister is in the process of putting measures in place to offer temporary tax reductions to companies hit by the crisis, saying that this could cause serious damage to the economy costing the country the equivalent of £873 million in total.

Mexico is saying that there is no proof that swine flu can be caught by eating contaminated meat and are backed by scientists in this and therefore think it is unfair their exports are being stopped.

After banning all pork products from the UK, Spain and parts of Canada and the US, and banning all meat imports from Mexico, Russia’s chief veterinary inspector says: “we are constantly told that pork is not dangerous, but at the same time, nobody has proved that it is safe.”

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In the first quarter of this year mobile phone sales have plummeted by a record amount due to the financial crisis according to a research company.

During the first quarter of this year the number of phones that were shipped worldwide fell by 13% compared to the same period last year, putting the number at approximately 245 million.

According to Strategy Analytics all five of the biggest mobile phone makers’ sales have dropped.

However, the Apple iPhone has defied the current convention with a 123% gain in sales.

However, according to Strategy Analytics, things are not as bad as the third quarter of 2001.

In the first quarter of this year, Nokia – the biggest mobile phone maker had a market share of 38%, three percent less than this time last year after its sales dropped by 19% to 115.5 million units.

Apple’s First Phone Only One To Make Profit

Motorola is in a worse predicament as figures show that their sales are down by 28% compared to this time last year at £3.7 billion. This came from the sales of 14.7 million handsets, just over half the number that they sold last year.

Sony Ericsson have also had a bad quarter after selling just 14.5 million mobiles between January and March, which is 35% lower than the number they sold between January and March last year, making a pre-tax loss of £319 million.

Samsung and LG didn’t do too badly in comparison to the latter couple of companies. Samsung sold 46.3 million phones, only a 1% fall, and LG sales shrank by just 7% to 24.4 million.

Computing company Apple’s first phone, the iPhone had sales of around 3.8 million, over twice the number of units it sold the previous year (1.7 million).

Strategy Analytics said: “We expect Apple to launch one or more new models in the coming months as it seeks to maintain its breakneck growth rate.”

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