Demand for manufactured goods at home and abroad has
weakened since the start of the year and the outlook for economic growth is
sluggish according to two CBI reports.
August’s Industrial trends survey, which polled over 1,200
manufacturers, reveals that four in ten firms have reported low orders.
“The weakening of demand to its lowest level for
two-and-a-half-years is yet more evidence of the impact of the global economic
slowdown on manufacturing,” said Sudhir Junankar, CBI associate director of
economics analysis.
“Failing demand is increasing competitive pressures in the
domestic market and forcing factory gate prices down. Worsening output
expectations suggests many firms see no immediate prospect of their marketing
reviving.”
GDP is forecast to increase by 2 per cent this year as a
result of the worldwide slowdown and foot-and-mouth disease, compared with 3.1
per cent during 2000.
The CBI’s quarterly economic forecast predicts that growth
will bounce back next year to an average 2.5 per cent but this is still 0.2 per
cent below the predicted figure in the previous quarterly forecast.
“Despite benefiting from stable oil prices and some revival
export markets, manufacturing will continue to be the key weak spot in the UK
economy,” said director-general of the CBI, Digby Jones.
“The likely upturn in the world economy will feed through
next year but deliver only modest manufacturing growth. Firms are continuing to
do all they can by raising productivity but a further interest rate cut will
still be needed.”
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By Paul Nelson
