Lack of demand delays manufacturing sector recovery

There
is no sign of a manufacturing recovery with weak domestic and international
demand blocking the sector’s long-awaited turnaround.

The
latest CBI Monthly Industrial Trends survey, published today (Thursday), shows
the more competitive pound has yet to benefit exporters, and manufacturers need
a cut in interest rates to lift confidence across the hard-pressed sector.

Order
books showed no significant improvement on last month and continue to be
considerably less than normal. 
Thirty-nine per cent of firms said orders were below normal, while just
12 per cent said they were above.  The
balance of -27 per cent compares with -29 per cent recorded in the May and
April surveys.

Overseas
demand remains weak with export orders below normal and slightly worse than
last month.  The balance of -35 per cent
compares with -32 per cent last month.

Firms
continue to expect output to decline modestly over the next four months.

The
balance of -6 per cent of companies expecting to cut production compares with
-3 per cent last month.  Manufacturers
have not expected a rise in output since October 2002.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Comments

This field is for validation purposes and should be left unchanged.

Δ

Doug
Godden, CBI head of economic analysis, said: "Demand at home and abroad
remains persistently weak and output continues to stagnate.  Companies are cautious about the future, and
with no danger from inflation, an interest rate cut remains appropriate."

By Ben Willmott