Drop in manufacturing output raises new concerns

Monday 10 December 2012

Manufacturing

Greater support may be needed for the UK manufacturing sector, following another difficult month for British industry, it has been suggested.

Output declined by 0.8 per cent during October 2011, according to figures from the Office for National Statistics.

Many commentators had expected an increase in growth rather than the decline witnessed at the start of Q4 2012.

"Although we should not focus too much on one month’s figures, it is clear that the manufacturing sector is facing major obstacles to a sustainable recovery," said David Kern, chief economist at the British Chambers of Commerce.

“Clearly manufacturers have to adjust to a difficult reality of weaker growth prospects, but British businesses have the will and the ability to make progress if given the right support," he stated.

"While continuing to reduce the deficit, the government must provide firms with the confidence to invest and grow to ensure that our economic recovery is sustainable over the long term.”

Mr Kern said that despite the decline in growth during October, there is "no justification for pessimism".

Manufacturing is still a significant sector of the UK economy and it continues to benefit from a competitive exchange rate, he claimed.

"Weak growth in world trade will limit the scope for significant rises in manufacturing exports, but the sector is well-managed, and has the potential to recover," Mr Kern added.

"Crucially, many manufacturing firms have been able to maintain their skill bases during the recession."

Posted by Dan Smith