This time we’ll be examining the most recent previous economic downturn in 1991-92. This recession was triggered by the effects of global slowdown as well as the collapse of the UK property bubble.
The nature of recovery was broadly similar to the 1980’s, but with :
- An earlier peak to unemployment (10% in 1993) and a lengthy hangover in the housing market – “negative equity”
- Job insecurity affecting white collar as well as blue collar workers
- Continuing de-industrialisation
- Growing force of globalisation (UK brewing industry acquired by global giants)
Under John Major’s government much of Thatcher’s policies were continued:
- Emphasis on market forces (e.g. NHS reforms)
- Tighter control of government spending
- Further loosening of regulation (e.g. Pub and shop opening hours)
However in marked contrast the majority of the populace were actually diverging from such policies. The British Social Attitudes Survey asked if “Government should increase tax and spend more on social welfare”. In 1983, 32% had agreed; by 1993 this figure had grown to 63%. Socially, British attitudes to relationships and sex “were characterised by pragmatism, common sense, tolerance and some respect for traditional monogamous ideals” (A. Marwick, ‘British Society Since 1945′).
The latter 1990’s were essentially a continuation of the late 1980’s: the UK was now regarded as a dynamic economy, in which enterprise was rewarded and foreign investment was welcomed.
Further potential of IT
Global capitalism (the deregulated City, demise of USSR, metamorphosis of China and India)
Medical applications of life sciences
Affluent society (substantial rise in affluence since 1980)
STRONG GROWTH MARKETS AND INDUSTRIES
PC’s, Mobile phones, satellite and cable TV
Financial services, business services
Japanese car plants (Toyota, Honda)
Ethnic targeted products
New/enhanced treatments and drugs
Premium products and brands
Low price air travel
English premier league football
Sex industry (Ann Summers)
FMCG Innovation was very limited in 1991 & 1992. This was followed by a somewhat patchy recovery – strong in 1993, weak in 1994, strong again in 1995. Major themes in 1993-95 included old favourites convenience and snacking, but also new technology and aspiration – affordable aspiration and aspirational lifestyle.
So looking back at the last recession of the 20th century, how did Britain fare?
- Reinforcement of dynamic UK economy
- Developing consumer demand is met effectively across a broad range of products and services
- Continuing existence of “underclass” making only marginal economic/social contribution
- FMCG innovation was less robust than during 1980’s
- Government increasingly out-of-step with population
Next time we’ll try to summarise some of the useful lessons from history; and some pointers for the prospects on the other side of the current recession.