Manufacturers hit by weak UK and European demand growth
WEAK domestic and Eurozone demand is dragging down output expectations in the UK’s manufacturing sector, industry data showed yesterday, hitting hopes that the economy will bounce back in the next quarter.
Nineteen per cent of manufacturers saw order books above normal in May, the Confederation of British Industry’s (CBI) industrial trends survey showed, while 36 per cent were below normal, leaving a net balance of minus 17.
Meanwhile a net balance of three per cent expect output to fall over the next three months, sharply down from the balance of 24 per cent who forecast rising output just a month ago.
BNP Paribas’ UK economist David Tinsley warned the survey data points to a fall in the manufacturing component of GDP in the second quarter, hitting overall growth.
“The official manufacturing output release has been weaker than the surveys, so the sector will do pretty well to manage a flat level of output in the second quarter,” he said.
“When the extra public holiday is included, a fall in production is more likely than not.”