Activity in the UK’s manufacturing sector hit a two-and-a-half-year high last month, according to a survey.
The Markit/CIPS for the sector rose to 56.1 in December from 53.6 the month before. A figure above 50 indicates expansion.
The weaker pound helped to boost orders from overseas, the survey found, with the sector starting the year on a “strong footing”.
However, it also said that cost pressures faced by firms remained high.
“The UK manufacturing sector starts 2017 on a strong footing,” said Rob Dobson, senior economist at IHS Markit.
“Based on its historical relationship against official manufacturing output data, the survey is signalling a quarterly pace of growth approaching 1.5%, a surprisingly robust pace given the lacklustre start to the year and the uncertainty surrounding the EU referendum.
“The boost to competitiveness from the weak exchange rate has undoubtedly been a key driver of the recent turnaround, while the domestic market has remained a strong contributor to new business wins.”
December’s headline PMI reading was a 30-month high, and the Markit/CIPS survey said rates of growth for production and new orders last month were among the best seen over the past two-and-a-half years.
It said companies saw “stronger inflows of new work from both domestic and overseas clients, the latter aided by the boost to competitiveness from the weak sterling exchange rate”.
Sterling fell sharply against other currencies last year following the UK’s vote in June to leave the EU, which has made UK goods cheaper for buyers from overseas.
However, the weakness of the pound has pushed up the price of imported goods, which has led to higher costs for many manufacturers.
The survey said price pressures remained “elevated” in December, with inflation for input costs and output charges remaining “among the fastest seen during the survey history”.
It added that companies passed on the higher costs, with selling prices rising for the eighth month in a row.
Many analysts expect these rising costs to lead to higher prices for consumers this year, pushing up the rate of inflation.
Thousands of homes for first-time buyers will be built this year, according to the government.
Thirty areas across England are to receive funding from the £1.2bn “Starter Homes Land Fund” for new developments on brownfield sites.
Buyers must be aged between 23 and 40 and will receive a discount of at least 20% below market value.
However, one housing expert told the BBC that the timescale for the programme was too ambitious.
The Starter Homes Land Fund was first announced by the coalition government in 2014 and aims to help more people buy a home.
The discounts will apply to properties worth up to £250,000 outside London, or £450,000 in the capital.
Housing Minister Gavin Barwell said: “This government is committed to building starter homes to help young first-time buyers get on the housing ladder.
LSE housing professor Christine Whitehead on the government’s starter home fund
“This first wave of partnerships shows the strong local interest to build thousands of starter homes on hundreds of brownfield sites in the coming years. One in three councils has expressed an interest to work with us so far.”
The were chosen on the basis of their ability to build the properties quickly enough. They include Blackpool Council, Bristol City Council, Sheffield City Council and Luton Borough Council. The properties are expected to go on sale in 2018.
But speaking to the BBC, Christine Whitehead, Emeritus Professor in housing economics at the London School of Economics, said the “timescale is much too short, it’s not that easy to build on land that quickly, and we are anyway short on skills”.
John Healey, Labour’s shadow housing secretary, said: “These so-called starter homes are a symbol of the Conservative record on housing.
“Ministers launched them in 2014 but will only start to build the first in 2017, promised they’d be affordable for young people when they’ll cost up to £450,000, and pledged to build 200,000 by 2020 but no-one now believes that’s possible.”
Prof Whitehead said that, even with government help, some young people were not in a strong enough financial position to participate in the scheme: “[They] often haven’t got very strong jobs, they’re insecure about their future, they’re paying high prices in the rental market and therefore can’t afford the deposit.”
This is the government’s second announcement this week on measures to tackle the UK’s housing shortage. On Monday, for England’s first garden villages on 14 sites spread across the country from Cornwall to Cumbria. It said the new developments could provide 48,000 homes.
In addition, it said three new garden towns would be built at Aylesbury, Taunton and Harlow & Gilston, in addition to seven already in the pipeline.
Later this month, the government is due to publish its White Paper on housing supply in which it will set out its plans for building new homes.
It was a game of Dots that pushed Erik Coelingh to rethink his entire approach to self-driving cars. Coelingh, Volvo’s head of safety and driver assist technologies, was in a simulator, iPad in hand, swiping this way and that as the “car” drove itself, when he hear an alert telling him to take the wheel. He found the timing less than opportune.
“They gave the message when I was close to getting a high score,” he says. Jolted away from the absorbing task, he had no idea of what was happening on the “road,” or how to handle it. “I just realized,” he says, “it’s not so easy to put the game away.”
The experience helped confirm a thesis Coelingh and Volvo had been testing: A car with any level of autonomy that relies upon a human to save the day in an emergency poses almost insurmountable engineering, design, and safety challenges, simply because humans are for the most part horrible backups. They are inattentive, easily distracted, and slow to respond. “That problem’s just too difficult,” Coelingh says.
And so Volvo, and a growing number of automakers, are taking you out of the equation entirely. Instead of developing autonomous vehicles that do their thing under most circumstances but rely upon you take the wheel in an emergency—something regulators call Level 3 autonomous capability—they’re going straight to full autonomy where you’re simply along the ride.
Google figured this out around 2012, when it decided that full autonomy—no steering wheel, no pedals, no human backup—was the best way forward. Almost everyone else has embraced this way of thinking, abandoning the step-by-step approach and promising to begin launching fully robotic cars within a few years. The shift came as automakers recognized the difficulty of the “handoff”—getting the person behind the wheel to take control at a moment’s notice.
Automakers also saw only incremental improvements in safety, convenience, and value by advancing from Level 2 autonomy—cars that can keep their lane and handle rush-hour gridlock—to more sophisticated systems that still require human intervention. Going straight to levels 4 and 5 and offering a fully autonomous vehicle creates new markets, and new opportunities to challenge the likes of Uber and Google.
The Handoff Conundrum
It should be noted that these designations, defined by SAE International, are are squidgy, and don’t directly correlate to specific vehicles automakers are developing. For the sake of this discussion, Level 3 autonomy defines cars capable of basic decision-making like when to change lanes or pass other vehicles. The human at the wheel can check out entirely to, say, play an iPad game, but must be ready to take control if something goes amiss—a sensor fails, for example, or the car’s map doesn’t quite match the terrain.
Level 3 seems like a natural evolution of the tech you find in Tesla’s Autopilot, which demands vigilance even if not everybody obeys. More work for the robot, less for the human. But it’s a Herculean challenge for engineers and designers. “Having a human there to resume control is very difficult,” says Bryan Reimer, an MIT researcher who studies driving behavior. Once relieved of the burden of constantly paying attention, people are quick to lose focus, and getting them back on task is difficult. Imagine you’re watching the final moments of The Shining when someone suddenly turns on the light and tosses you a Rubik’s cube. How quickly could you register what’s happening, let alone attempt to solve the puzzle? Now you see the challenge of the handoff.
To make Level 3 work, the car must verify its human hasn’t, say, dozed off or strapped a VR headset to his face. This involves installing cameras and sensors to monitor things like head position and gaze direction. It means providing visual, aural, and haptic alerts to get the person’s attention. And it requires making absolutely sure the autonomous technology is robust and sophisticated enough to handle any situation for the 5 to 10 seconds needed to for the human to realize what’s happening and take control.
Simply put, solving this problem is almost as difficult as figuring out how to make cars drive themselves. That’s why Google—whose autonomous effort is now called Waymo—almost immediately abandoned any thought of building anything but a fully autonomous car. It started with a system that could handle highway driving with human oversight. Google’s engineers soon realized those humans were lulled into paying zero attention, and that they were all but useless in such circumstances. So they started pursuing full autonomy.
A tech company like Google or Uber can go for the moonshot, but automakers tend to be more conservative. They prefer small steps, gradually refining and introducing new technology to prepare consumers for the changes ahead. And so most of them planned to progress steadily through the ranks of Level 2, 3, and so forth. Ford was among the first to break ranks, announcing in late 2015 that it would skip Level 3. “We’re really focused on completing the work to fully take the driver out of the loop,” Ken Washington, the automaker’s head of research and advanced engineering, said at the time.
Beyond being difficult to achieve, Level 3 autonomy is difficult to justify. If every car on the road featured Level 2 capabilities, fatal automobile collisions would drop by 80 percent, according to Delphi, one of the world’s largest automotive industry suppliers. Level 3 doesn’t advance the ball much further, so why bother? Full autonomy, on the other hand, brings safety improvements while also bringing mobility to people who cannot drive, automating deliveries, and creating other opportunities.
The Money Question
Still, any automaker willing to throw enough time, money, and engineers at the problem can solve the Level 3 conundrum. Audi has all of those things in great quantity and plans to bring Level 3 capability to its flagship A8 sedan in 2018. The car will handle stop-and-go traffic to start, with highway capabilities to follow. Audi, which offers some of the best user interfaces in the business, has spent many years and many dollars studying the handoff, which it considers a top priority. Its solution, while not yet complete, will include driver monitoring systems and a combination of alerts the human will see, hear, and feel.
Still, even Audi sees the future, and so it is quietly pursuing a parallel track toward full autonomy. Like everyone else in the industry, it sees new markets and new competitors in a game that is rapidly changing. Car-sharing and other alternatives to ownership are growing increasingly popular, and upstarts like Uber see an opportunity to push established players aside. That’s why Ford, which more than any other outfit made automobiles ubiquitous, is rebranding itself as a “mobility” company and General Motors is buying robo-car startups and working with Lyft to develop an autonomous ridesharing network.
It is difficult to overstate the impact Uber and Lyft have had on this. The financial allure of ridesharing services that don’t rely upon human drivers has changed the calculus. “It’s an arms race to provide the mobility on demand,” says Delphi CTO Jeff Owens.
Uber wants to drop the human chauffeurs who gobble up the majority of its customers’ fares. Google could free up time in the car for riders to use its other services. Cities who host these fleets of robo-cars get a new way to tackle costly congestion and free up parking spaces for other uses. And the automakers—Ford, GM, BMW, and others—might slice off their chunk of an industry whose potential value Boston Consulting Group pegs at $42 billion a year by 2025.
But none of that works until they take you entirely out of the picture—and let you finally get that Dots high score.