Oil investment collapse hinders manufacturing sector expansion

 
Chris Papadopoullos
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UK MANUFACTURERS will grow by less than previously expected this year, an industry body said today, after a recent loss of momentum.

Growth in orders from both the UK and abroad slowed in the last three months, EEF said.

"Manufacturing is still growing, just not at the pace anticipated at the beginning of the year. The sector is still in positive territory, but the ground is looking a lot less firm beneath its feet," said EEF economist Lee Hopley.

"Much of this weakening is down to the impact of the decline in oil and gas activity on the supply chain. There is a range of challenging factors at play, but the net result is that this weakening trend looks set to continue, potentially even through to the end of the year."

However, manufacturers that provided goods for the construction and consumer sectors were seeing business hold up well, EEF said. The organisation has revised down its 2015 growth for the sector to 1.5 per cent from 1.7 per cent. The sector makes up around 12 per cent of the economy.

Another survey, detailing the business activity of manufacturers in May, will be published today by financial information provider Markit.

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