Wednesday 19 June 2019 4:37 pm

CBI: UK manufacturing growth nears three-year low

Navdeep Yadav is an MA Financial Journalism student at City, University of London.

A steep fall in car production saw UK manufacturing growth fall to its weakest level in nearly three years in the three months to June, new data has revealed.

Car manufacturers’ 83 per cent plunge was its worst quarterly drop since the height of the financial crisis over the quarter, the Confederation of British Industry (CBI) Industrial Trends Survey found.

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That contributed to flat manufacturing output in the three months to June, marking the UK’s slowest production rate since April 2016.

Car manufacturers’ decision to close their plants in anticipation of a no-deal Brexit in March sent vehicle production down by 45 per cent in April.

“The bringing forward of planned closures to car manufacturing plants had a real impact and led to manufacturing output grinding to a halt,” said Alpesh Paleja, CBI’s principal economist.

“While the picture elsewhere in the sector was more benign, total orders weakened once again revealing some underlying causes for concern.”

“There’s clear evidence that Brexit uncertainty is really biting, with our surveys showing volatility in both stocks and output in recent months.

“Firms are desperate to see an end to the current impasse – that means securing a Brexit deal that can not only command the support of parliament and the EU, but prioritises the protection of jobs and the economy,” he added.

However, the CBI expects output to improve from a one per cent drop in May to rise by four per cent over the next three months.

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The picture for manufacturing output was somewhat better outside of the motor vehicles sector. Ten out of the other sixteen sub-sectors saw growth, particularly in the chemicals and food, drink and tobacco categories.

Tom Crotty, chair of the CBI’s manufacturing council, said: “Manufacturers are proving highly resilient in the difficult circumstances they face, but these results are further evidence of how ongoing Brexit uncertainty is holding back growth in key industries.”