Good news on exports amid gloom

Jul 8 2008 by Andrew Mernin, The Journal

Sobering statistics from the job market and manufacturing

A FALL in manufacturing output prompted a leading economist to warn that the UK is perilously close to recession yesterday.

The Office for National Statistics (ONS) said manufacturing output fell 0.5% between April and May. Analysts had been expecting a 0.1% decline.

Paul Dales, UK economist at Capital Economics, said the data added to recent evidence that the UK economy was perilously close to recession.

“The lower pound should mean that the manufacturing sector is the UK’s shining light, but with output no higher than eight months ago, it seems that the global and domestic slowdowns are having more of an impact,” he said.

There was a significant fall of 1.5% for machinery production, the ONS said, with no significant increases elsewhere in the manufacturing sector.

The job market

AMID worsening economic conditions, the demand for permanent staff in the UK fell for the first time in five years last month.

According to a report by the Recruitment and Employment Confederation and KPMG, last month saw permanent placements continue to plunge while temporary billings rose at the slowest pace in five months.

Brendon Howlett of KPMG, said: “This really is a sobering set of figures proving the credit crunch has finally taken its toll and is now severely weakening the UK jobs market.

“Employers seem to be accepting the inevitable – they will have to cut costs by laying off people.”