New orders for UK’s industrial output fall to 3-year low

| September 1, 2008 | 0 Comments
New orders for UK's industrial output fall to 3-year low

Figures from the Engineering Employers Federation (EEF), the manufacturers’ organisation, have revealed that new orders for the UK’s industrial output have fallen to their lowest level for 3 years.

As a result, the majority of manufacturers are now cutting staff rather than hiring and the EEF has warned that it is essential that the Government deal with the economic downturn ‘head on’ in order to reduce the impact on jobs in the sector.

The warning comes in spite of another quarter of double-digit growth for industrial output – the 12th in a row, however, the slowing economy and deteriorating eurozone are starting to filter through, according to a survey by EEF and accountants, Grant Thornton.

The study found that the balance on orders is down by 11 points, primarily owing to a 13% fall in domestic orders, and margins are being squeezed by higher energy costs.

Steve Radley, the chief economist of EEF, said in the face of the credit crunch, the economic slowdown and an increase in costs, the manufacturing industry has shown resilience. However, there is now evidence that these factors are beginning to take their toll.

The Chartered Institute of Purchasing and Supply’s manufacturing PMI survey, revealed that firms reported widespread job cuts for the fifth consecutive month.

The PMI survey of 600 companies also established that there was a marked deterioration in conditions with new orders declining and cost pressures still acute.

The most recent official data illustrates that the UK economy was at a standstill in the first three months of 2008.

In related news, in an interview with the Guardian newspaper, Chancellor Alistair Darling said the UK is facing the worst economic downturn in 60 years and it will be ‘profound and long lasting’.

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