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Official data confirms manufacturing slowdown
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06/08/2008
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Latest government data published yesterday (5 August) confirmed findings from recent private surveys indicating toughening times for the manufacturing sector.
With the usual warning about monthly growth rates being volatile, June’s official figures showed output of the manufacturing industries falling by 0.5 per cent and featured a significant decrease in output of 1.8 per cent in the electrical and optical equipment industries.
The more reliable quarterly data showed manufacturing output falling by 0.8 per cent compared with the previous quarter. There were significant decreases of 1.6 per cent in the food, drink and tobacco industries and 4.4 per cent in the ‘other manufacturing industries not elsewhere specified’.
Commenting on the new figures, Lee Hopley, EEF Head of Economic Policy said: "Until now, the evidence has suggested that the pain was limited to sectors closer to the consumer or construction. While the picture remains mixed there is growing concern about the outlook for the second half of the year and the potentially damaging scenario for manufacturers of falling demand married with increasing costs."
Nigel Bailey, Relationship Director for the Manufacturing Sector at Barclays Commercial Bank said: “This news follows findings from a CBI survey released this week that reported a fall in confidence within the sector in the wake of commodity price increases. Lower UK expenditure on goods such as food, drink and tobacco, has seen this sub sector hardest hit with output down 1.6 per cent in the quarter.
”However, those manufacturers with sales outside of the UK are still finding it possible to take advantage of a weak pound, and export order books, particularly those engaged in the oil and gas industry are reported to be strong. UK Manufacturers with access to export markets are finding it easier to protect their volumes and margins than those who depend solely on the domestic market.”
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Author
Ken Hurst
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