The manufacturing recession was deepening even
before events in America last week, it has been revealed.
The CBI’s monthly trends figures for September
revealed that total order books are showing their worst position for
two-and-a-half years and stocks of finished goods have risen to their highest
level for six months.
The survey – with the vast majority of
responses being received before the terrorist attacks in the US – showed that
42 per cent of manufacturers reported total orders being below normal. Eleven
per cent said they were above normal.
The negative balance of minus 31 per cent showed a slight worsening
since August, when there was a negative balance of 29 per cent.
The impact of the global slowdown continues to
damage exports, with 50 per cent saying order books are below normal and 9 per
cent reporting they are above normal. The minus 41 per cent result compares
with minus 39 per cent last month.
Manufacturing output is expected to fall
further and the largest decreases are expected in metal manufacturing and
electronic and electrical engineering.
Sudhir Junankar, CBI associate director of
economic analysis, said, "It is clear that recessionary pressures were
tightening their grip on UK manufacturers, even before last week’s tragic
events in America. The last thing they need now is a further deterioration in
world trading conditions.
"This week’s global cuts in interest rates
should help over the medium term. The Bank of England should stand ready to
take further action if conditions continue to worsen."
By Lisa Bratby