Belfast Telegraph

Manufacturers feel pain as orders and staff levels fall

By Peter Cripps and Heather McGarrigle

Manufacturers are facing a "bleak winter" after suffering further falls in orders and staff levels in November, a survey has revealed.

The Markit/CIPS purchasing managers' index (PMI) survey, where a reading below 50 indicates a contraction, fell to 47.6 in November, down from 47.8 the previous month and its lowest since early 2009.

The downturn in output accelerated in the month, leaving the sector on track to contract in the final quarter of 2011 as the eurozone debt crisis hit exports and confidence at home.

This triggered the biggest fall in employment for two years, with warnings of more cutbacks on the way unless order books pick up.

Graeme MacLaughlin, relationship director at Barclays Corporate, said: "With global manufacturing giants including Coca Cola and Toyota announcing major new investment in the UK this week, it is disappointing that the sector as a whole remains so subdued.

"This lack of confidence and the situation in Europe is now so entwined that despite some positive news for UK industry in the Chancellor's Statement and the announcement of Belfast as a green energy hub along with a significant allocation of funding to Northern Ireland for infrastructure development this week, it is difficult to see the mood amongst manufacturers budging much.

"Until we see major contracts awarded to Northern Ireland companies and new infrastructure projects under way, this is unlikely to change."

CIPS chief executive David Noble said: "It looks like it's going to be a bleak winter for UK manufacturers with the PMI showing very little to be positive about at the moment."

The continued poor performance of the sector will come as a blow to the Government's plans to strengthen the economy through export-led growth.