Taking the Lead on Investment

The latest statistics from the manufacturing sector are a strange mixture of good and puzzling. On the one hand, the rise in the respected Purchasing Managers’ Index (PMI) from 53.1 in January to 54.1 last month indicates quite clearly that sector sales are on an upward trend which, according to a recent editorial published by Insider Media, reflects an increase in domestic demand for goods.

Manufacturing activity is reported to be at its highest since last July while factory costs are said to be falling at their fastest rate for six years.

Against such a buoyant background it seems odd that business investment in the sector has been weak. Manufacturers of plant and equipment are experiencing weak order books and the slowest output rate since September last year. Possible theories include uncertainty over the outcome of the next UK General Election in May and the problems faced by the European Union over some of its members, such as Greece.

Whatever the reason, we all know it takes confidence and a certain amount of courage to commit to capital expenditure. But we also know that, with the pace of technology in the fast-moving market place of today, no one can afford to stand still. Add in factors like a growing domestic economy and historically low interest rates, has there ever been a better time to invest in the future? At any rate, that’s Tenkay’s view which is why we remain committed to a continual programme of capital expenditure to keep our factory totally up to date with the latest equipment.