Pounds continues to fall

[Money]

According to the BBC, the value of the pound continues to fall against the dollar. Which is good news for those earning in USD, but not so good when outsourcing in USD: Pound’s fall continues to $1.48 The pound has continued to fall against the dollar, hitting its lowest rate in six years against the US currency on [...]

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[MichaelWall]

I sell a few software products primarily to the US market and noticed something like a £35 difference in a product over the last few months.

[frauke]

It would be a really good time to become a UK manufacture exporting!

I have a very good friend who I have been trying to help to set up a company, which manufactures its own products to sell in the UK and overseas. But her personal life keeps interfering so she keeps making excuses ..... Also she thinks she should get her product made in China. I keep pointing out, that it is cheaper to manufacture in the UK (which is surprisingly true), and the quality is far, far better here. I have a client that was importing from China to sell in the Europe, and nearly everything imported over the last 12 months has been rejected and returned due to poor quality!

We have finally agreed to try and find someone who can use a industrial sewing machine! You'd think this was easy with so many people looking for work, but its not that easy to find someone with this skill any more!

[Joff]

Frauke, unfortunately the UK has been pretty lacking in any real manufacturing for a while. We as a nation, import as it's always been blue skies and white fluffy clouds. Now the economy is [to quote Richard Branson] f**cked, businesses are having a really hard time.

A couple of my clients are UK distributors for US and European products and are having to hike UK RRP's by insane amounts for everyone in the distribution network to be able to make money and survive. These costs are picked up by the consumer.

Also, regarding the cost of UK vs China (in terms of monetary and quality costs), the UK isn't always best. Same client again imports from China as there simply aren't the facilities in the UK to produce the parts, at least not at a price that would be affordable to joe public.
Obviously keep manufacturing in the UK where possible but those engineering firms that are still in business are struggling and even they don't always have the skills required.

[frauke]

Local to where I live there are a handful of Engineering Firms who are have their best ever year. They all have full order books (from non UK companies) forward over 12 months, which until 2007, 3-6 months was doing well. A few are even supplying companies in China!

An English engineer I know, who had been based in China since 1998 came back earlier this year and he told me the reason for his return, was due to costs in China going up due e.g. to the pollutions restrictions - the Govt were actually shutting factories down that were not spending the money to comply, and the high cost of raw materials which they were starting to struggle to obtain and could not afford anymore. He felt the UK was a better place to be, as he also felt things were CHEAPER here than in China! I have finally spoken to my Agent in China (who is supposed to be looking for a company to make a product for me) and he has confirmed all this. China is in Trouble. They can no longer get the raw materials cheaply (thats if they can get them), and the costings that are coming back are really high. The UK is now cheaper, but volume here is the problem.

US companies are struggling becuase the dollar is so strong, and so are European companies becuase the Euro also is strong. The pound is weak - and what is left of UK manufacturing (non automotive) is doing extremely well! As I said, it would be a good time to set up a UK manufacturer!

[Joff]

Ah that's probably where our industries are divided - my clients are primarily in the automotive parts business! Now it all makes sense

[frauke]

Its a pity, in the UK the 2 biggest industries - Automotive and Building have both been hit really hard. The other manufactures that have survived have been decimated, but are benefiting from what is going on out there.

My engineer friend also told me that a lot of companies admitted it was now cheaper to operate in the UK than China, but they had already invested so heavily in China they could not justify relocating the factories back in the UK. Someone else I know (who is a non-clothing buyer of one of the major UK dept stores, also told me, this year they reduced the amount they are purchasing from China because the products are too expensive. They are buying from Turkey, Korea, South America and the UK more than ever before. They also told me that t/o on this part of their business has increased by 30% on last year - which surprised me, as most UK retail outlets are having a really hard time at the moment.

[Brian Turner]

Still going down - $10,000 now worth around £6,900.