Belfast Telegraph

Manufacturers faring better than rest of UK

By Clare Weir and Peter Cripps

A "disappointing" slump in UK manufacturing figures may not be reflected in Northern Ireland, according to an industry expert.

That view follows news the UK's manufacturers reported a deterioration in their order books in August.

A survey compiled by the CBI business body revealed that 15% of firms said their total order books were above normal in the three weeks to August 15, but 36% said they were weaker, with demand for consumer goods particularly badly hit.

The resulting balance of minus 21%, the worst performance since December and below the long-run average, fuels fears that the UK will struggle to emerge from the longest double-dip recession in 50 years in the third quarter of 2012.

Bryan Gray, from industry body Manufacturing NI, said that Northern Ireland's manufacturers are faring slightly better.

"Although these figures are very disappointing they are not wholly unexpected, following the recent Purchasing Managers' Index for July which is once again under 50 indicating contraction," he said.

"This is however a national survey and we would hope that local companies are faring somewhat better than their cross-channel counterparts due to supply chain dynamics and exports to the Republic of Ireland where the manufacturing sector is the only one in Europe which has returned to growth."

Export order books in the UK showed a similar decline, with a balance of 17% saying they were worse than normal, as the eurozone debt crisis hurt demand from overseas.

Although it is possible that the survey was adversely hit by the Olympics, it added to the gloom by indicating that manufacturers' confidence in future growth also deteriorated.

A separate survey by Markit/CIPS found manufacturers put in their worst performance in more than three years in July, providing further worries about the strength of the economy in the third quarter of 2012.

The Government had hoped that the manufacturing sector would lead the UK back to growth but it has struggled to grow exports, with the eurozone - its biggest trading partner - suffering and the UK mired in recession.

However, the CBI survey had better news for consumers after firms said they expect output prices to be largely flat for the third month in a row, in a further indication that inflation is easing.

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