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UK Factory Exports Decline

UK Factory Exports DeclineUK Factory Exports Decline

UK factories have seen only limited signs of a recovery in exports amid “global uncertainty”, according to a survey from business lobby group the Confederation of British Industry.

The three months to January saw new export orders remain “near-flat” - an improvement on the previous quarterly figures which showed a sharp fall, BBC quoted a report from CBI as saying.

Optimism about the general business environment remained negative at -4%, up from -12% recorded in October. Manufacturing has lagged the recovery in the rest of the economy since 2013.

Rain Newton-Smith, CBI director of economics, said: “Uncertainty around the prospects for global growth, uncompetitive energy costs and the strength of the pound have all played their part in UK manufacturers finding conditions tough when trying to sell overseas.”

“Over the longer term, strong investment in innovation and skills is vital to boosting our performance in exports, so it’s great to see firms planning to invest more in training and products over the next year.”

A survey of 465 businesses showed that investment intentions for the next 12 months had improved and that employers expected to recruit new staff over the coming three months, having put hiring on hold during the last quarter.

The report echoed other recent signals from manufacturers that turmoil in emerging markets and a gloomy global economic outlook have dented orders from overseas. Export order books edged down in January but remained above their recent trough in October and November, the CBI said.

The subdued picture underlined economists’ expectations that the country’s GDP figures later this week will show the economy largely relied on the services sector for growth in the final months of 2015, while construction and manufacturing struggled. The economy is expected to have grown 0.5% after 0.4% expansion in the third quarter.

The survey follows official data showing manufacturing slipped into recession last year. The manufacturers’ organization EEF has forecast tens of thousands of job losses in the sector this year as it grapples with steel plant closures and a sharp drop in orders from the embattled North Sea oil and gas industry.

But in the CBI survey, 25% of firms said they expected employment to increase in the next quarter and 17% expected it to decrease, giving a balance of +8%, marking a turnaround from October’s net balance of -8%.

Financialtribune.com