Manufacturing orders slump fuels fresh double-dip fears
Uk manufacturers reported a plunge in total orders this month, a key survey has revealed - adding to evidence that economic recovery is grinding to a halt.
Total order levels dipped in September after growing in August, the CBI Industrial Trends Survey said, while export orders are the lowest since October last year.
However, there was positive feedback as manufacturers predicted orders will increase over the next three months, despite the recent drop-off in activity.
The survey is likely to fuel concerns for overall growth in the third quarter - July to September - following similarly downbeat data from the Office for National Statistics and Markit Purchasing Managers' Index (PMI).
Howard Archer, chief UK and European economist at IHS Global Insight, said: "Manufacturers are plainly finding life much more challenging now, as domestic demand is held back by serious headwinds - including tightening fiscal policy and the serious squeeze on consumer purchasing power - while weaker global growth is hitting exports hard."
The CBI said 22% of manufacturers described total orders as above normal in September, while 31% said they were below, with the resulting balance of minus 9% indicating a drop in activity. This compares to a positive reading of 1% in August, which suggested growth across the sector.
A sharp fall in consumer goods firms acted as the main downward driver, the CBI said. But despite the decline, both total and export orders remain above the long-term average.
The weak survey adds to the economic gloom engulfing the UK in recent weeks, with soft manufacturing growth, declines in the powerhouse services sector and stagnant trade all raising the chances of a double-dip recession.
Ian McCafferty, CBI chief economic adviser, said: "UK manufacturers report some slackening in demand this month, following the volatility in financial markets and the slowdown in growth in our major trading partners."