Cheap fuel could see off the Chinese.
Byline: RUSSELL LUCKOCK
THE unexpected move by China in repositioning its currency downwards is for Midland manufacturers a worrying development.
By making their goods that much cheaper, they are hoping to push their current poor export figures upwards.
The downside for us is that, at a time when the British pound is strong with manufacturers and producers already having difficulty in exporting due to our products being too expensive, the additional competition from China is the last thing required.
To survive, businesses are going to have to re-examine their costs in order to try to compete in a fierce world marketplace where money is very tight and demand not exactly buoyant.
One of the problems all enterprises have to face is the unexpected steep increases in the minimum wage.
Coupled with the inevitable pressure for differentials to be maintained, to be competitive is going to be challenging.
One way the Government can help is by bringing pressure to bear on power suppliers to reduce their prices.
Although gas prices have dropped, I am certain that, by having regard to wholesale prices, more could be passed on.
In so far as electricity is concerned, there is a growing problem of availability of supply, not helped by coal-fired generating plant being closed down. The current glut of oil on world markets has resulted in a much reduced price for fuel.
It behoves businesses to bring pressure to bear on somewhat tardy transport contractors to pass on the full benefits of reduced prices.
This is not happening at the moment, yet businesses need every of penny of savings to be able to compete.
British-manufactured goods are held in high esteem by our overseas customers for excellent quality and durability and they would like to buy more. The problem, as ever, is price and the devaluation of the renminbi by the Chinese will cause real problems to British businesses.
I hope that, with the main holiday period coming to an end, government ministers will get down to the task of seeing what they can do to assist British business as the monthly unemployment figures are already starting to creep up and people on the dole do not pay taxes.
Action is needed soon.
Russell Luckock is chairman of pressings firm AE Harris