Over at the TUC:
But it’s worth looking at the index figure itself. The index compares the seasonally-adjusted level of production with 100 being the figure for 2006. The July 2010 figure is 90.8, which is certainly up from the low point of 86.0 last August, but its well below the figures of over 100 just before the recession. If you exclude the recession, the last time the index was this low was in the recession of the early 1990s, and the last time before that was late 1988 – it’s as if we’ve lost more than 20 years of growth.
The Bank of England’s agents reported last month that business confidence has “ebbed”, that investment plans are “focused on asset replacement and maintenance” and that spare capacity has been eliminated only in “pockets” of manufacturing – for the most part businesses expect to be able to meet future demand from existing resources.
So this may be as good as it gets. The odds that private sector growth will take up the slack as the public sector contribution to growth is removed are getting longer by the day.
Evidence of spare capacity in the private sector is evidence that there won\’t be any growth in the private sector?
Evidence of spare capacity is evidence that growth will be easier. Because all we\’ve got to do is start using that spare capacity rather than waiting a few years while more capacity is built.
Growth is measured as production, after all.