UK manufacturing hit by falling orders

The UK’s manufacturing sector saw its order books weaken during November as export orders suffered particularly strong falls, Confederation of British Industry (CBI) research shows.

The findings add to the raft of bad manufacturing data recently published and exacerbates fears that the UK is heading towards another economic slowdown.

Some 34% of manufacturers responding to the CBI’s latest Industrial Trends Survey say their order books are below normal levels, while only 15% report them to be better than usual.

The resulting balance of -19% is a “significant worsening” from conditions earlier in the year, the employers’ organisation says.

Export orders fared even worse, with 42% of respondents saying their export order books are worse than usual normal levels and 11% reporting them to be stronger than normal.

The export order balance of -31% is the lowest reading since January 2010 and the first time it has dipped below the long run average of -21% since February 2010.

Ian McCafferty, chief economic adviser to the CBI, says: “Developments in the eurozone, and their impact on prospects for our major trading partners, are clearly hitting the UK manufacturing sector.”

He adds that manufacturers are likely to cut back on production in the coming months due to uncertainty over global prospects and sharp falls in business confidence.

The most recent Purchasing Managers’ Index from Markit and Chartered Institute of Purchasing and Supply Manufacturing stood at 47.4 for October. This is down from 50.8 in September and its lowest in 28 months.

As a reading of less than 50 indicates that activity in the sector is contracting, the index raised concerns that the UK economy is slowing as it enters the fourth quarter.

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