40,000 jobs to go as manufacturing decline deepens

than 40,000 manufacturing jobs will be lost in the first quarter of 2003, according to a study by the

CBI’s Quarterly Industrial Trends survey, published today (Wednesday), also
shows manufacturers’ confidence dropping further as weak global demand
threatens to keep the sector mired in recession.

number of manufacturers operating below capacity has risen to a 20year high, fuelled by a
relentless two-year decline in orders and output.

three-quarters of firms are now working below capacity, the highest percentage
recorded since January 1983. This follows two consecutive surveys where 67 per
cent of companies operated under capacity.

survey finds 31 per cent of firms saw a fall in total orders in the four months
to January, while 22 per cent reported a rise. The balance of minus nine per
cent follows the minus 16 per cent recorded in the October survey, and marks
the eighth consecutive quarter of declining demand.

also fell and firms no longer expect any noticeable rise in orders or output
over the next four months. 

in overseas markets have continued to deteriorate. Export orders fell at the
fastest rate for a year while export prices fell at the fastest rate since July 2000. As a result, export
optimism for the year ahead fell for the second consecutive quarter.

optimism also fell, with 30 per cent of firms less optimistic about the
business situation than four months ago, and 11 per cent more optimistic. The balance of minus 19 per cent
matches the figure recorded in October and compares with plus four per cent in

McCafferty, CBI chief economist, said: "Large sections of UK factories are
standing idle. Figures show the
number of manufacturers working below capacity has risen to a 20-year high,
causing firms to plan further cuts in investment and jobs. With little let-up
in the two-year decline in orders and output, the overall picture will concern

Ben Willmott

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