EEF predicts 10.9% drop in manufacturing output
EEF, the manufacturers’ organisation, has downgraded its economic forecasts and now expects UK manufacturing output to fall by 8.6% this year, with a pick-up to 0.2% in 2010. In engineering, it forecasts a 10.9% decline in 2009, recovering to 0.9% next year.
The EEF’s first-quarter survey, based on responses from 782 UK companies, shows that the pace of the downturn has accelerated, with several indicators hitting record low levels. The organisation is now forecasting that 140,000 jobs will be lost in manufacturing during 2009.
“There is simply no hiding the fact these figures make grim reading,” says EEF chief economist, Steve Radley. “The past three months have been extremely difficult for manufacturers, with markets at home and abroad showing severe declines. However, whilst few firms expect things to get better in the near future, they are also focusing on making sure they are ready to take advantage of the eventual recovery.
“The priority for government remains getting credit flowing again and helping companies to invest,” he adds. “In addition, there is now an urgent need to support companies in hanging on to the skilled workers they will need for when the upturn comes. Government must now consider all possible avenues to help companies deliver alternatives to redundancy.”
Only 15% of the companies surveyed reported an increase in export orders, suggesting the global slowdown may have prevented the weaker pound providing much of a boost to exports.