UK manufacturing hits 3-year low amid falling exports, lack of domestic demand
Britain’s factories suffered their worst month in three years in April as falling export orders and a lack of domestic demand for consumer goods squeezed manufacturing output.
Growth in factory output has been on the slide for a year, but last month the manufacturing sector contracted for the first time since March 2013. Economists believe the decline will drag on GDP growth this year.
Financial data provider Markit, which carried out the survey, said manufacturers had blamed slower growth in the UK and a downturn in new export orders alongside “rising uncertainty about the global economy, the oil and gas industry, retail sector and the EU referendum”.
The slump in factory output probvided a double blow for George Osborne after the European commission downgraded its forecast for UK growth this year to 1.8%, down from a previous forecast of 2.1%, before inching up to 1.9% in 2017.
A fall in jobs was a knock-on effect of the factory activity downturn, said Markit. Its data shows almost 20,000 job losses over the past three months, mostly among large employers.
Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said the job cuts were “the clearest sign yet that referendum uncertainty is starting to weigh on the real economy”.
She added: “However, this is just another straw on the back of a sector already grappling with the struggling oil and gas sector, softening domestic demand and weak order outlook from other parts of the world, all of which are failing to provide any counterbalance to the political uncertainty at home.”
