For what we receive

Notice anything odd about the news lately? Did you, for example, listen to all those prognoses of economic gloom and Mayan doom that pervaded the media around the turn of the year – when the press in general fills up otherwise dead air and empty pages with ‘books of the year’ and ‘what will happen in 2012’?

Do your eyes well up when you think about having to make do as best you can through what is everywhere confidently expected to be another year of economic collapse, falling sales, slumping pension values and job insecurity? If so, how do you cope? Do you reach for the gin bottle – easy on the tonic, Mabel – and hope to stay gracefully slid on the downslope of another recession? And what about the orphans??

Or do you, perhaps, sit back and look around at what is actually going on in this business and wonder whether it all stacks up? Look, for instance, at some of the reports we have for you this month. Everywhere there is investment, growth, construction – and not just in those places you might expect: China, India, Brazil and the other new economic powerhouses.

No, there is massive new capacity being built to handle gasoline storage in northern Europe; there are orders going in to rebuild and expand the US’s petroleum tank barge fleet; global tank container operators are handing out orders for thousands of new tanks to meet surging demand; packaging producers report record levels of sales.

So why the disconnect? Why are the pervasive forecasts all speaking of red figures when we can see all around us the healthy shoots not just of recovery but of absolutely vibrant growth? Or, as some readers might put it, WTF??!!

Two things. Your publisher has been around long enough to have spotted by now that bad news sells papers and gets people listening to the radio or watching TV. Bad news is what people want to hear, because then they can sit at home with a full belly and think themselves fortunate.

Also, and more pertinently, Fings Ain’t Wot They Used To Be. Back in the day – pre-1980s, certainly – GDP growth, chemical demand and energy consumption in the developed world travelled along an almost identical path. The more money we made, the more was spent on stuff, and the more energy we consumed. And in those days, the money we made in the west (and in Japan and Australia) was made mostly out of making things. Manufacturing begat profit, profit begat consumption, and so on in a virtuous cycle.

Now, though, life is not so simple. GDP in the EU and North America no longer derives from manufacturing. We don’t have much left (well, outside Germany, anyway). GDP derives increasingly from services. We make money out of doing stuff on behalf of other folks, because that’s what we’re good at. We’ve been doing it for years.

Take, for instance, the shipping industry. The UK’s shipbuilding industry was the biggest in the world for centuries, right up until the 1960s. The UK built more ships, owned more ships, carried more cargo, and ran all the ancillary services, right up until the point when Japan figured out how to do it better and cheaper. That didn’t last very long, though; then the Koreans figured out how to do it even more cheaply and today we look (like in so many other sectors) to China first.

But – and here’s where it gets interesting – a whole load of the cash in the shipping industry still flows through London, because that’s where it always went. So much cash washes around London, and everyone it touches takes a commission, that the UK still retains a vital role in the business – and a seat on the IMO Council – despite there being no major shipyards left and very few internationally trading ships flying the Red Ensign.

Where the pain is felt is in those towns that used to build ships. Global financiers don’t keep shiny new offices in Glasgow or Barrow or Belfast, they keep them in London. And it has been a very long time indeed since the world’s largest shipyard was in Deptford. So, go easy on the gin and maybe spare a thought for those who are no longer in a position to benefit from this surge in business many of us are enjoying this year. And hope the Mayans weren’t right.

Peter Mackay