The Resource Crunch IS Crushing Growth
Yesterday I was perusing The ENDS Report (possibly my last edition, but that’s a different matter) when I saw this from Tom Burke:
Nearly a third of profit warnings by FTSE 350 companies in 2011 were attributed to rising resource prices. An EEF survey found 80% of senior manufacturing executives thought limited access to raw materials was already a business risk. For one in three it was their top risk.
That is shocking – particularly in light of the need to rebalance the economy towards manufacturing.
Added to this is the energy situation (data taken from the EIA). The spike in oil prices probably burst the debt bubble in 2013 and, according to the EIA, the continuing high oil prices (three times what they were 10 years ago) are crushing economic recovery. Shale gas might be giving some light relief in the USA, but is clearly having little impact on global oil prices – the two usually relate. Unconventional sources rely on high prices on conventional reserves to make them viable, so we are very unlikely to go back to the days of cheap energy.
I’ve said it before and I’ll say it again – the choice is not “green or growth” but “green or stagnation”. We must reframe every argument in this way to meet this challenge head on. Lip service and/or burying our heads in the sand will get us nowhere.