UK factory output expectations plunge to 10-year low
British factories’ own expectations for output fell in September to their lowest in more than 10 years, according to a survey that showed Brexit and a global slowdown weighing on manufacturing.
The Confederation of British Industry’s (CBI) monthly manufacturing order book balance fell to -28 in September from -13 in August, below poll expectations of -18.
The survey’s gauge of output expectations for the next three months dropped to -19 from -1, its lowest since April 2009, as stocks of finished goods piled up at the fastest rate since the 2008-09 financial crisis.
The figures chimed with a slew of dismal manufacturing data across Europe, after a survey on Monday showed German factories at their lowest ebb last month in over 10 years.
Trade conflict between the United States and China and a global downturn in the automotive sector have hammered manufacturers all over the world. The escalating Brexit crisis has additionally dampened investment in British manufacturing, which accounts for 10pc of economic output.
“The survey does little to suggest that the manufacturing sector have been of much help to UK growth in the third quarter,” economist Howard Archer from the EY ITEM Club consultancy said.
“The very real risk that a no-deal Brexit could yet occur on October 31 could well fuel near-term concerns over manufacturers’ supply chains and ability to meet future demand.”
Earlier yesterday, the Supreme Court ruled that prime minister Boris Johnson’s decision to shut down the British parliament for five weeks in the run-up to Brexit was unlawful, a humiliating rebuke to him.
Consultants at Capital Economics yesterday put the odds of a no-deal Brexit at 40pc.
“Each day of Brexit uncertainty sees firms forced to withhold key investment and recruitment decisions,” said Tom Crotty, Ineos group director and chair of the CBI manufacturing council.
Reuters
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