Manufacturing downturn threatens 86,000 jobs

The
renewed manufacturing downturn has hit confidence and orders in every UK
region, prompting new estimates of 86,000 job cuts in the first half of this
year.

The
latest regional health check of UK manufacturing, published quarterly by the
CBI and Experian Business Strategies, shows firms have been cutting jobs throughout
the country since Christmas.

Five
out of 11 UK regions expect a modest recovery in orders over the next four
months, but this is unlikely to boost employment, with firms expecting to
continue losing staff in every part of the country except Scotland.

The
rate of job cuts has been fastest in the South East and slowest in the South
West. The most rapid decline in jobs is now expected in the North West.

The
new manufacturing decline is being driven by a sharp deterioration in domestic
demand as weak global trading conditions spread to the home market.

For
the first time since July 2001, no region recorded an increase in orders over
the past four months.  

The
sharpest declines in orders were reported in the North West, the East Midlands
and the East of England. Only Northern Ireland avoided a downturn, with orders
remaining unchanged.

Export
orders over the past four months fell in every region except Yorkshire and the
Humber, with substantial declines recorded in the South West and the North
West.

Peter
Gutmann, associate director of Experian Business Strategies, said: "The
deep pessimism in this survey is partly a timing issue. Sentiment was affected
by the uncertainty surrounding the war in Iraq, which coincided with the survey
period.

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"However,
the underlying malaise in the global economy is a depressing factor, clearly
reflected in backward looking indicators. New orders in the past four months
fell at their fastest rate for four years. Manufacturers clearly see little to
excite them in the current environment. With conflict in Iraq behind us, it
remains to be seen whether a global recovery will develop which, coupled with
sterling’s fall over the past year, will provide some relief."

By Ben Willmott