Midlands manufacturers could play a major role in leading the UK economy out of recession.
According to Thomas Becket, chief investment officer at Psigma Investment Management, there has been a resurgence in manufacturing across Europe, the US and China, in the last six months. This is underpinning global economic growth and improving confidence levels for the first time since the crash in 2008.
He said: “For the last five years manufacturers have been laying off workers, stopping conveyor belts and not investing. There’s been a sea-change this year and we are starting to see some momentum building. We expect the global economy to finally return to trend growth in 2014. Of all the global economies, the UK has the best delta of growth for the coming 12 months, with manufacturing, the backbone of the Midlands’ economy, leading the charge.”
Psigma builds bespoke investment portfolios for private clients. Mr Becket and his colleague James Knowles, head of fixed interest, spoke about the economy and financial markets at an event hosted by sister company Punter Southall Financial Management (PSFM), at Birmingham’s Hotel du Vin.
The audience heard their top investment tips for 2014.
Mr Becket said equities remained his favoured “long-term asset class of choice”.
He added: “A balanced investment portfolio should now include stocks from Japan, the Eurozone, China and the US.
“’Abenomics’ has started to work in Japan and what was a moribund economy is now off the canvas; despite this, stocks are still accessibly priced.
“If you are looking for stable but solid growth, the US and China are still good bets. China has slowed, but that’s relative, it’s still a massive economy with plenty of expansion room. The US hasn’t enjoyed the best press of late but similarly it’s a moderate bright spot and driver for global growth and its corporates are enjoying some of the best margins in history.
“Europe remains weak, but deterioration has stopped and things are improving. It’s a good time to get in on the ground floor.”
Richard Meek, chartered financial planner and principal at the PSFM, said many people with cash in the bank had struggled to get an income in the last few years.
He added: “This situation is unlikely to change in the short-medium term. The new Bank of England governor, Mark Carney, is intent on holding interest rates down.
“It’s now so difficult to generate a good, fixed income from deposits that you have to think outside the box to optimise your investments. With a diversified but balanced portfolio of investments it is possible to achieve above inflation growth and generate a secure income.”