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1998 was a particularly difficult year for the
china and earthenware industry, the full extent of which will only become
apparent when many of the larger companies file their accounts in the financial
year ending 31st December 1998. Factories have closed and the market has been
hit by redundancies, particularly in the Stoke-on-Trent area where the industry
is concentrated. There appears little hope for improvement in the near future,
except that companies will have streamlined operations and be ready to take
instant advantage of any change in global trading conditions.
The large
manufacturers are major exporters and continue to suffer the effects of strong
sterling. This makes their exports expensive, imports of weaker economies cheap
and has depressed the spending power of foreign visitors to the UK.
The
troubled Japanese economy, in particular, is to blame for a falling trade
surplus.
The value of exports to Japan in 1997 was £62.8m compared to
£78.5m in 1996, and is likely to be significantly less for 1998.
By
refocusing on the domestic market, intense competition has caused prices and,
consequently, margins to fall. The next economy has to be on the workforce and
the prestigious names of Royal Doulton and Josiah Wedgwood are amongst those
companys which are reducing their workforce.
Consumer expenditure on
household durables, whether necessary or luxury, also faces increased
competition from other areas such as leisure, holidays and savings. This,
however, is encouraging for the companies involved in higher margin hotelware,
as the trend towards eating out more continues.
It will be some time into
1999 before the effects of recent cuts in interest rates are felt and many
feel, at any rate, that they were too little, too late to stem the descent into
manufacturing and retailing depression.
The china and earthenware industry
was virtually static in the early years of the decade and an increase in market
value in 1996/1997 was short-lived.
Apart from adverse economic conditions,
the trend towards casual lifestyles reflected in the purchase of mid-price
tableware continues at the expense of quality fine bone china.
Key Note
estimates the value of the UK market to be £1.2bn in 1998. The year 2000
will extend the market for commemorative items of premium quality. However, a
general and significant upturn in the domestic and international markets must
be seen before the industry can achieve any notable growth.
Text © 1999 Key Note
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Last updated by Jacob van Eldik 21th January 2000