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Independent: UK services sector shrinking for first time in eight years

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Yet another indicator that things continue to head south...

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The UK’s services sector – which makes up more than three-quarters of the economy – has contracted for the first time in eight years, painting a “particularly gloomy outlook” for the country, according to new research.

An index of services output slumped to 94.7 in July from 96.9 the previous month, with anything below 95 indicating the sector is contracting.

It is the first time services, which includes retail, banks, hotels and media companies, among others, have registered a decline since February 2010, said professional services firm BDO, which commissioned the research.

Heavy emphasis on "Brexit uncertainty" again, no acknowledgement of the more long-term factors at play.

 

 

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Just over 2 years ago, a large complex of 25+ resturants a cinema and bowling alley opened up in Southampton called West Quay South. The town is already saturated with resturants. I imagine this has happened all over, and it has to stop at some point. Not everyone can afford a regular £50+ for 2 to dine out. 

In the last few months, chains "The Diner" and "CAU" have both closed for business. And i can see a few more going before the year is out

Edited by Monkey

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22 minutes ago, Monkey said:

Not everyone can afford a regular £50+ for 2 to dine out.

Not long term anyway.

This is why I think we may be in for massive deflation in some areas. All this debt has accumulated for no productive gain (restaurants and cinemas are not productive relative to auto lines and chemical plants), so there is a lot of apparent cash which doesn't actually exist.

Once these on-performing debts are defaulted on, that is a lot of cash which is simply going to vanish literally overnight.

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9 hours ago, Locke said:

restaurants and cinemas are not productive relative to auto lines

How is making food for somebody to consume any less productive than making a car for somebody to consume?

The only real producer is the big bang which put hydrogen in the sun and minerals under our feet. All humans are doing is consuming that free lunch.

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21 minutes ago, Dorkins said:

How is making food for somebody to consume any less productive than making a car for somebody to consume?

 

I can make a meal, even grow food

I can't make a car.

 

Plus, going out to eat is hardly anything special.  It's the same crap from the same wholesalers, with a different selection of flavourings and accompaniments.  Even chips I can do better at home if I like, with proper fat not crap toxic veg oil.

Where as my attempt at a car would be downright dangerous

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1 hour ago, chronyx said:

I can make a meal, even grow food

I can't make a car.

Uh, so what? I bet there are people working on car production lines who can't cook.

People have a mystical attachment to making cars as if this is real productive work, not like other types of work that the market is just as (if not more) willing to pay for.

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55 minutes ago, Dorkins said:

Uh, so what? I bet there are people working on car production lines who can't cook.

People have a mystical attachment to making cars as if this is real productive work, not like other types of work that the market is just as (if not more) willing to pay for.

I bet you could teach them to cook pretty quickly.  And pretty much the only tool required for basic cooking are matches.  

Try to make anything else around us from scratch.  A TV? A phone?  May be I am going too complicated.. A lightbulb?  A battery?

Pretty much anything mass-produced is super-complicated but extremely cheap these days.  How is a meal for 3 people in a restaurant is the same price as as a computer monitor?! 

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Ha Joon Chang tackled the issue of the importance of manufacturing compared to services in one of his last 2 books. Sorry, can't remember which one.

His argument is, roughly, that manufacturing has a greater potential for increased productivity than most services. 

So, once you can cut hair or pour a decent pint, how much more efficient can you be? As to designing and making a car, there are myriad processes that can be made more efficient, new materials designed, etc. Basically, manufacturing has a much greater scope for increased productivity.

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13 hours ago, Locke said:

...(restaurants and cinemas are not productive relative to auto lines and chemical plants)...

 

15 minutes ago, Voice of Doom said:

Ha Joon Chang tackled the issue of the importance of manufacturing compared to services in one of his last 2 books. Sorry, can't remember which one.

His argument is, roughly, that manufacturing has a greater potential for increased productivity than most services. 

So, once you can cut hair or pour a decent pint, how much more efficient can you be? As to designing and making a car, there are myriad processes that can be made more efficient, new materials designed, etc. Basically, manufacturing has a much greater scope for increased productivity.

I think that's still consistent with the initial statement that manufacturing is more productive than restaurants. 

So the economy based on manufacturing should be overall more productive than economy based on services? 

Of course we could just count drugs, prostitution and imputed rent as GDP instead, to show that everything is fine and there is nothing to worry about.  But that would be just crazy, wouldn't it?

 

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33 minutes ago, Voice of Doom said:

Ha Joon Chang tackled the issue of the importance of manufacturing compared to services in one of his last 2 books. Sorry, can't remember which one.

His argument is, roughly, that manufacturing has a greater potential for increased productivity than most services. 

So, once you can cut hair or pour a decent pint, how much more efficient can you be? As to designing and making a car, there are myriad processes that can be made more efficient, new materials designed, etc. Basically, manufacturing has a much greater scope for increased productivity.

Don’t you mean automation and very few jobs for humans ? No company likes employing people , capitalism is a constant war of attrition to reduce headcount, services are resistant to that in the main surely a good thing?

 

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11 minutes ago, Bear Hug said:

 

I think that's still consistent with the initial statement that manufacturing is more productive than restaurants. 

So the economy based on manufacturing should be overall more productive than economy based on services? 

 

Yes, definitely still consistent with that point (which I think I missed on scanning the thread!)

And I'm guessing Ha Joon Chang would argue that an economy with a significant manufacturing sector simply has greater potential for increased productivity. Not sure whether it is more productive per se in every instance. I'd guess though that the Germans work fewer hours than us (UK) for the same GDP/head.

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14 minutes ago, GregBowman said:

Don’t you mean automation and very few jobs for humans ? No company likes employing people , capitalism is a constant war of attrition to reduce headcount, services are resistant to that in the main surely a good thing?

 

And not only does automation destroy jobs, it reduces the purchasing power of people who then struggle to buy the products being made by the capitalists leading to "crisis". Of course, new jobs are eventually created and the cycle turns...not saying any of this is good or bad, just how I understand it from what I've read.

That said.... even though automated beer and wine dispensers exist, I still prefer to have a human pour mine in a bar!

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7 hours ago, Dorkins said:

Uh, so what? I bet there are people working on car production lines who can't cook.

People have a mystical attachment to making cars as if this is real productive work, not like other types of work that the market is just as (if not more) willing to pay for.

Sorry, I can't dumb it down any more than that

Just out of interest, what answer could I have given that wouldn't have resulted in your usual ******wit snark?

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40 minutes ago, chronyx said:

Sorry, I can't dumb it down any more than that

Just out of interest, what answer could I have given that wouldn't have resulted in your usual ******wit snark?

How about a coherent definition of production that makes it clear why manufacturing cars is productive while cooking is not?

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6 hours ago, Voice of Doom said:

His argument is, roughly, that manufacturing has a greater potential for increased productivity than most services. 

So, once you can cut hair or pour a decent pint, how much more efficient can you be?

Yes, but the fact that many services are hard to automate is just an expression of the state of technology, it doesn't mean it can't be done. At the moment we don't have robots that can carry out services like cutting your hair, fixing your plumbing, picking you up from the airport, operating on your tumour. Maybe one day we will and these things will become much cheaper.

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20 hours ago, Monkey said:

Just over 2 years ago, a large complex of 25+ resturants a cinema and bowling alley opened up in Southampton called West Quay South. The town is already saturated with resturants. I imagine this has happened all over, and it has to stop at some point. Not everyone can afford a regular £50+ for 2 to dine out. 

In the last few months, chains "The Diner" and "CAU" have both closed for business. And i can see a few more going before the year is out

I think West Quay will pretty much be the last shopping centre inthe UK. Ever.

There's a couple of smaller places - Bstoke I think. But I reckon these will fail.

Retails moved to having a destination centre every 80/100 miles.

As far as the West Quay eateries. Not sure theyll survive - bunch of PE backed Metoo! places.

 

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10 hours ago, Dorkins said:

How is making food for somebody to consume any less productive than making a car for somebody to consume?

The only real producer is the big bang which put hydrogen in the sun and minerals under our feet. All humans are doing is consuming that free lunch.

Youve the economists buckets:

Money into wealth creating/productive assets - factories, whatnot. Things that use money to create money.

And consumption - food, hair dressers, pubs. Things that take money and flush it down the toilet.

 

 

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11 minutes ago, spyguy said:

And consumption - food, hair dressers, pubs. Things that take money and flush it down the toilet.

If you buy a car the money ends up in the car dealer's hands. If you buy a meal the money ends up in the restaurant's hands. In neither case does money end up in the toilet.

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4 minutes ago, Dorkins said:

If you buy a car the money ends up in the car dealer's hands. If you buy a meal the money ends up in the restaurant's hands. In neither case does money end up in the toilet.

1.7.12%20Diagram%20of%20the%20alimentary

 

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2 hours ago, Dorkins said:

Yes, but the fact that many services are hard to automate is just an expression of the state of technology, it doesn't mean it can't be done. At the moment we don't have robots that can carry out services like cutting your hair, fixing your plumbing, picking you up from the airport, operating on your tumour. Maybe one day we will and these things will become much cheaper.

 

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13 hours ago, Dorkins said:

How is making food for somebody to consume any less productive than making a car for somebody to consume?

Farmers make food, not restaurants. 

Cooks prepare food.

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9 hours ago, Voice of Doom said:

His argument is, roughly, that manufacturing has a greater potential for increased productivity than most services. 

This is my point, Quantitative easing always ends in recession, but if you spent the magic money on productive capacity  (i.e manufacture, energy production, farming equipment etc) rather than useless shite like restaurant real estate, you come out the other side in much better shape.

9 hours ago, Voice of Doom said:

Basically, manufacturing has a much greater scope for increased productivity.

I disagree. If you took out thousands of quid on a credit card, would you be better off if you spend it on a lathe or hookers and blow? Some things are fundamentally more value-producing than others. Commies/Marxists might not like it, but different things are vlaue differently.

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2 hours ago, spyguy said:

I think West Quay will pretty much be the last shopping centre inthe UK. Ever.

There's a couple of smaller places - Bstoke I think. But I reckon these will fail.

Retails moved to having a destination centre every 80/100 miles.

As far as the West Quay eateries. Not sure theyll survive - bunch of PE backed Metoo! places.

 

Heck no.

The planning system here is like something developed by Salvador Dali.

Saying that, I think disposable income may well take a significant nose dive with Brexit and these crap eateries will definitely be turning over with increased frequency.

Good I say. Fvck all these sh1te restaurants with their limited menu's, high prices, and the awful way they employ and manage staff.

Hopefully a renaissance of the boho neighbourhood restaurants and shops... just have to get councils in line and press the commercial landlords into action to fill the dead zones these malls and pop-ups create in town centres.

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21 minutes ago, zugzwang said:

 

Can I have her in my kitchen?

Perhaps a robotic model (they are coming sooner than you thing) ...

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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