MANUFACTURERS’ order books continued to collapse in September, survey data showed yesterday, while economists today forecasted very weak economic growth in 2012 and 2013.
Eight percentage points more firms reported declining orders than reported increasing orders, the Confederation of British Industry (CBI) said, while some 10 percentage points more reported falling export orders.
These scores were both improvements on last month, when on balance 21 per cent reported declining total orders, but still represent substantial decline, and since they are forward looking, suggest worse times might be yet to come.
One nugget of positive data was the expectation many firms had that they would increase their output over the coming three months. On balance seven per cent of firms expected to increase output – last month positive and negative responses balanced out.
Still, economists at the ICAEW were downcast on growth in a separate report, released today. They predict that the economy will decline half a percentage point over the year, followed by just 0.9 per cent growth in 2013.
The report goes on to forecast that unemployment will rise from 8.1 per cent now to 8.4 per cent in 2013, while nominal wages will continue with weak increases.
“In this low growth environment, we are seeing businesses adapting to a new normality,” said Robin Fieth, executive director at ICAEW, “As businesses are not confident about the future, they are reluctant to invest, reluctant to increase pay, and are more cautious in their future aspirations.”