logo
Plus   Neg
Share
Email

EEF Cuts UK Manufacturing Forecasts

British manufacturers are set to have a subdued end to the year amid the weaker global economic outlook, the U.K. manufacturers' association EEF said Monday.

A survey by the group showed that output balance at UK manufacturers fell for the fourth time and was at the lowest level since 2009 in the third quarter. This is likely to weaken further in the final three months of the year, thanks to the falling oil price, the EEF said.

"The prospect of manufacturing contributing to growth in the UK economy this year has all but faded away with another disappointing set of indicators from our survey," EEF Chief Economist Lee Hopley said.

Both export and domestic market prospects were also less upbeat. Exporters were less optimistic about European markets and almost 60 percent cited no improvement in demand in any main market.

Concerns about world trade growth and the weakening demand from both developed and emerging markets have become more prominent, the survey said.

Domestic order balance was negative for yet another quarter and the confidence about the UK economic outlook over the next 12 months were also weak. The bright spots in the domestic market were automobiles, aerospace and chemicals sectors.

Consequently, the survey logged its first negative employment and investment balances since the first quarter of 2010.

The EEF lowered the UK manufacturing growth forecast for this year to -0.1 percent and the prediction for next year was cut to 0.8 percent.

"The downbeat mood may not be universal across all industry sectors, but it certainly seems to be spreading as the challenges have mounted through this year - from the collapse in the oil price, slower world trade growth and weaker than expected construction activity," Hopley said.

"The fact that this is contributing to manufacturers pulling back their employment and investment plans adds to the concerns about the sector going into next year."

For comments and feedback contact: editorial@rttnews.com

Economic News

What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.

Follow RTT