Manufacturers hope the worst slump in 30 years is slowing

The CBI’s latest quarterly Industrial Trends survey showed 60% of firms reporting a fall in the volume of new orders compared with the previous quarter, and 13% reporting an increase. The resulting balance of -47% is the lowest since October 1980. The very sharp falls in demand have resulted in continued job losses. Employment fell at the sharpest rate since October 1991 and manufacturers expect to continue making job cuts, albeit at a slightly slower pace next quarter. Based on the survey, the CBI estimates that 62,000 jobs were lost from the sector in the first quarter and that 51,000 will be lost in the second, bringing the total employed in manufacturing to 2.66 million. CBI chief economic adviser Ian McCafferty (pictured) said that although the first quarter of 2009 was extremely tough for UK manufacturers, the survey showed hope that the worst may be over, with the pace of decline slowing slightly. “Firms have run down their stocks more sharply this quarter, as demand and output have collapsed, but stock levels are still considered too high,” he went on. “Job losses have been steep, and training and investment plans scaled back significantly. “However, firms are hopeful that the pace of decline in manufacturing activity will moderate slightly in the next three months, and general sentiment is falling less rapidly for the first time in seven quarters.”