Manufacturing heading for toughest conditions for two decades
1 min read
If the idea that the outlook for Britain’s manufacturers has taken a significant turn for the worse needed confirmation, it came today (1 December) courtesy of the fourth quarter business trends survey from the manufacturers’ organisation EEF and Grant Thornton.
Trading conditions in 2009 are set to be some of the toughest for two decades, EEF warned.
Despite the improved performance of manufacturing in recent years, the sector is now going through a significant and sustained downturn, the report suggests. In response, EEF is calling for a further full point cut in interest rates by the Bank of England at its meeting this week.
EEF chief economist Steve Radley said: “What marks this downturn out from others is the alarming rate at which conditions have deteriorated through the autumn due to the problems in the financial markets.”
The survey showed that output and orders balances turn negative; domestic orders are at their weakest since 2001; the employment and investment outlook had worsened, that activity looks set to fall further in next three months; and 2009 forecasts show manufacturing falling by 5% and engineering by 6.3%.
Grant Thornton's head of manufacturing Bob Hale (pictured) said: "The quarterly survey indicates that the positive progress made by the sector over the last few years has been destroyed almost overnight by the catastrophic effect of the recent turmoil in the financial markets. The sector needs immediate and positive help from the Government and the Bank of England to ensure the release of funding for investment and development, and also for further help in interest rate cuts and tax incentives. Without this help the sector faces a very bleak outlook for 2009."
