UK Manufacturing Output Down
The global export markets have depressed the UK manufacturing output, according to accounting and business consulting firm KPMG.
“The manufacturing sector in the UK is starting to feel the impact of the slowdown in global markets. Data from Markit/CIPS UK manufacturing PMI shows that figures have contracted for the second successive month in November, down to 47.6,” John Leech, partner in KPMG’s automotive practice commented on the Purchasing Managers’ Index (PMI) data published by Markit/Chartered Institute of Purchasing and Supply (CIPS).
Leech said that as the Eurozone crisis continues to undermine business confidence resulting in the weakening of demand in the US and Asia as well as Europe, orders from export markets continue to drop.
“But how resilient are UK manufacturers? Those exposed mainly to UK and Eurozone customers are at most risk but even those that export to the US and Asia will experience more challenging conditions. We expect that next year will be a bumpy ride for manufacturers as conditions in the global markets are expected to worsen.
But Leech said there is hope despite these macroeconomic concerns.
“With the exchange rate being relatively weak at present UK exports are more price competitive and UK manufacturers are looking to see if they can increase local content within their supply chains,” he said.
“Overseas investors have noticed and a string of important inward investments in recent months by Tata, BMW and Toyota will continue to support the UK’s manufacturing base,” Leech added.