Manufacturing confidence plunges from a year earlier

 
Jessica Morris
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UK manufacturers are less optimistic than a year earlier (Source: Getty)

UK manufacturers are gearing up for a tough year as the country's economy slows and global conditions worsen.

The number of firms looking forward to an improved British economy slid to 37 per cent, from around two-thirds a year earlier, a survey by the EEF and Aldermore said today.

Additionally, firms expecting conditions in the UK to deteriorate more than tripled to 17 per cent from five per cent this time last year, according to the survey of 166 senior manufacturing executives.

Geopolitical concerns, rising input costs, unfavourable exchange rate movements and upward pressure on pay topped manufacturers' list of concerns.

UK manufacturing fell to a three-month low of 52.5 in December, according to the Markit/CIPS UK purchasing managers' index (PMI). The reading was above 50 points which indicates growth, but missed economists' expectations of 53.7.

Terry Scuoler, chief executive of EEF, said:

The sector is still making good strides, but confidence can be fragile and with an election on the way it is vital that uncertainty and disruption are kept to a minimum.

Recovery is by no means guaranteed and we would urge party leaders - and the next government of whatever shade - to remain focused on delivering a fully balanced, stable economy where manufacturing is enabled to expand and grow.

The Eurozone economy, which is one of the country's biggest trading partners, struggled last year, ramping up pressure on the European Central Bank (ECB) to start buying government bonds at its council meeting later this month.

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