Manufacturing growth ‘set to ease’


Published: Thursday 20th November 2014 by The News Editor

Comments (0)

The recovery in the manufacturing sector has continued to lose momentum as weak export orders reflect sluggish demand in the eurozone, the CBI has said.

Its latest industrial trends survey of 421 manufacturers also found that expectations for growth over the next quarter fell to their lowest level for 13 months.

Total new orders rose to a balance of plus 3 in November from minus 6 the month before, but were held back by export orders registering a balance of minus 17.

Orders were subdued due to weak demand in the eurozone and slowing growth in emerging markets.

Export orders were below-par in 15 of the 18 manufacturing sub sectors the CBI measures, with mechanical engineering the lowest for two years, although this was partially offset by a stronger performance in the aerospace sector.

Overall, the sector’s total order book remains above its long-term average of minus 16.

CBI director for economics Rain Newton-Smith said: “Overall manufacturing output remains quite strong, although growth is expected to ease against the backdrop of continuing global risks.”

The CBI’s survey comes as another closely-watched newly-published study reported that eurozone business activity fell to a 16-month low of 51.4 in November from 52.1 in October.

A mark above 50 indicates growth.

IHS chief UK economist Howard Archer said that the recent strength of the pound had not helped UK manufacturers.

Mr Archer added that despite the mixed bag of data there were still grounds for optimism among manufacturers.

He said: “Hopefully, still elevated consumer confidence, high and rising employment and relatively decent housing market activity will underpin demand for consumer durable goods, while earnings growth is finally showing signs of moving up.”

Consumer Price Index inflation edged up to 1.3% earlier this week but the Bank of England expects the figure will probably dip below 1% in the coming months – and that interest rates will not be raised until well into 2015.

Pay when excluding bonuses is rising by 1.3%, with the Bank forecasting pay to lift by an average of 3.25% in 2015.

Published: Thursday 20th November 2014 by The News Editor

Comments (0)

Local business search