Economic and political uncertainty both in the UK and around the world has weighed heavily on the country’s manufacturing performance last month
9, , , , , a:1:{i:0;s:8:”defaults”;}, special steels applications, Manufacturing Output Falls & New Work Contracts, Economic and political uncertainty both in the UK and around the world has weighed heavily on the country’s manufacturing performance last month, Economic and political uncertainty both in the UK and around the world has weighed heavily on the country’s manufacturing performance last month (August), the latest seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index has revealed.
Output volumes were down as new work contracted at the quickest pace for more than seven years, with business optimism also falling to a series-record low.
Big drops in new orders were seen across the investment, intermediate and consumer goods industries and where a decrease was reported, it was linked to weaker domestic and international economic conditions, concerns over Brexit, low market confidence, a slowdown in client spending and business uncertainty.
Uncertainty over Brexit, slower world economic growth and ongoing trade tensions around the world were all made mention of by manufacturers as reasons why overseas demand had fallen. And there were some suggestions that a number of EU-based clients were now moving supply chains away from the UK because of Brexit.
Group director at the Chartered Institute of Procurement & Supply Duncan Brock said: “The sector’s illness took a turn for the worse in August with the sharpest decline in domestic and export orders for seven years. Investment continued to peter out and heightened concerns about the UK’s political situation and the strength of the global economy acted as a drag on activity.
“As some clients from the Eurozone continued to move their supply chains away from the UK, declining orders from the US and Asia dashed any hopes of redemption, resulting in the sharpest fall in business optimism since at least 2012.”
He went on to say that as a result, the sector had to resort to making job cuts and increasing their prices to deal with the pressure put on them by the weakening pound.
And as Brexit continues, some companies are resorting to building inventory, while others are “unravelling their stocks”… and there is now a “creeping dread” among those in the industry that more obstacles are on the way.
Where Brexit is concerned, the BBC has just reported that the prime minister is thinking about calling for an early general election if MPs looking to block the chances of leaving the EU without a deal are successful in their efforts to call for a debate on this matter.
Tory rebels are now being warned that if they support this piece of legislation, they face being expelled from the Conservative Party and deselected.
A general election isn’t scheduled until 2022 but under the Fixed Terms Parliament Act, Boris Johnson would have to have the support of two-thirds of the 650 MPs in the UK in order to trigger an early election come the autumn.
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