Manufacturers are braced for worst
Dec 12 2008 by Iain Laing, The Journal
MANUFACTURERS have recorded their fears at the deepening economic downturn with a prediction of the biggest slump in output since 1980.
A balance of 42% of firms predict falling output over the next three months, according to the CBI business group’s industrial trends survey.
The figure – unchanged since November – came as manufacturers also reported the biggest fall in export orders since October 2003.
Ian McCafferty, the CBI’s chief economic adviser, said: “Figures for manufacturing continue to make depressing reading, with output still expected to fall rapidly in the coming months.”
The CBI’s downbeat survey comes after official figures showed an eighth successive monthly fall in manufacturing outpute earlier this week.
The CBI’s survey showed a balance of 33% of firms reporting export orders lower than normal as recession grips the world’s developed economies.
Mr McCafferty added: “It is worrying that, despite the 20% depreciation in sterling over the past year, export orders remain so weak.
“Our export competitiveness is increasing but many of our key export markets are contracting rapidly.”
Overall orders are also well below par with a 35% balance reporting a lighter than expected order book. While a slight improvement on the previous month, this figure is also close to five-year lows.
The CBI said the rapid economic decline was hitting firms’ pricing power, with larger companies employing more than 5,000 staff expecting to lower their prices over the next three months.
