THE woes of the UK manufacturing sector have been underlined by a survey showing export order books are in grim shape and output growth has stalled.
The survey, published by the Confederation of British Industry, is the latest in a raft of economic releases to highlight the degree to which Chancellor George Osborne’s vision of “a Britain carried aloft by the march of the makers” has failed to materialise.
UK manufacturers’ export order books were in their worst shape for six months in August, the CBI survey signalled. Only seven per cent of UK manufacturers reported export order books were better than normal, with 31 per cent reporting they were worse than usual.
Seasonally-adjusted figures published by the Office for National Statistics earlier this month showed UK manufacturing output fell by 0.8 per cent in July, having declined by 0.3 per cent in the second quarter.
The CBI’s latest industrial trends survey shows the proportions of manufacturers reporting rises and falls in output volumes over the past three months were almost equal, the weakest position for two years. This was a significantly weaker picture than that painted in the CBI’s August industrial trends survey when, subtracting the proportion experiencing a fall from that enjoying an increase over the previous three months, a balance of 14 per cent of UK manufacturers reported a rise in output volumes.
The weak manufacturing survey was among factors that weighed on the pound.
At 5pm, sterling was trading around $1.5356, down about one-and-a-half cents on its Monday evening level in London.
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: “The September CBI industrial trends survey will likely reinforce concern that the economy is going through a soft patch in the third quarter, although in truth the manufacturing sector has largely been struggling through 2015.”
He added: “The survey fuels already strong suspicion that manufacturing output is unlikely to contribute much to UK GDP (gross domestic product) growth in the third quarter, and could even have contracted again after a drop of 0.3 per cent quarter-on-quarter in the second quarter.”
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