Manufacturing bounceback gloom as exports stall

Jul 2 2010 by Iain Laing, The Journal

THE bounceback in Britain’s manufacturing industry showed signs of cooling last month as export order growth almost ground to a halt, according to new figures.

The Chartered Institute of Purchasing and Supply’s (CIPS) activity index, where a reading over 50 indicates growth, eased to 57.5 in June.

This was the ninth month of growth in a row, but down on the 15-and- a-half-year high of 58 seen in April and May.

Export orders – a key support to the recovery in recent months – slowed sharply as the eurozone debt crisis and a stronger pound hit sales to mainland Europe.

New export business posted only a marginal increase in June having hit a record high for the Markit/CIPS survey only two months earlier.

Rob Dobson, senior economist at Markit, said the survey suggested “conditions may have passed their peak”.

But there was some good news on the jobs front as manufacturers increased employment at the fastest rate since February 1995. The Purchasing Managers’ Index of activity reported ongoing strength in demand.