Manufacturing output ‘bleak but easing’

Ray O'Donoghue, Barclays' head of UK manufacturing, said: "On a quarterly level these figures make for bleak reading. However, the lower monthly rate of decline in December compared with last month's near record decrease (2.9 per cent) means the manufacturing sector is broadly in line with the US, where manufacturing figures show sector contraction is easing. Positive news in the UK service sector also bodes well for a reduction on sector pressures. "Although many businesses will continue to experience difficulty, equally Barclays Commercial Bank has manufacturing clients that are beginning to pursue acquisition plans both in the UK and internationally due to what many see as opportunity amongst the volatility. Declining input prices, reduced energy costs and favourable exporting exchange rates should also bring British manufacturers some cheer amidst a backdrop of negative news." Tom Lawton, head of manufacturing, at BDO Stoy Hayward also used the ‘bleak’ word to describe the sector’s outlook after more than three quarters of negative growth. He went on: “The intensity of the shock administered to manufacturing industry means that even strong, globally competitive businesses could go under. It has become apparent that helping just the banking sector is not enough. It is now essential that policy-makers develop packages to aid manufacturing industry and thereby help restore consumer and business confidence.” The most significant falls over the quarter came in the basic metals and metal products industries (9.4%), transport equipment (7.7%) and paper, printing and publishing (5.8%).