Belfast Telegraph

Squeeze on manufacturers is impacting on profitability

By Staff Reporter

Northern Ireland manufacturers are being "squeezed" and it is impacting on profitability, according to a leading industry spokesman.

Stephen Kelly of the trade body Manufacturing NI said companies here were feeling the effects of a strong pound and weak export orders.

A UK-wide survey from CIPS/Markit reported a "lacklustre" September, rounding off one of the weakest quarters of the past two years, as factory job numbers fell for the first time since April 2013. The last three months have also seen a downturn in orders from China, the world's second largest economy.

The survey said consumer goods producers - the sector's star performer over recent months - saw a contraction in new orders for the first time in almost three-and-a-half years.

It added that intermediate goods firms - which make items for use in products finished by other companies - saw the heaviest job falls in the sector.

Rob Dobson, senior economist at Markit, said: "The UK manufacturing sector remained sluggish at the end of the third quarter, stunned by a triple combination of a sharp slowdown in consumer spending, weak business investment and stagnating export order inflows."

He added that the "ongoing malaise" in the manufacturing sector "supports dovish calls for a first rise in interest rates to be held off until industry returns to a firmer footing".

Stephen Kelly said the report broadly reflected what local manufacturers are experiencing at present: "Great Britain is our most important market and any slowdown there would impact greatly on local manufacturers too. Indeed, with euro exchange rates still hurting and more concerns about global growth, our local manufacturers are being squeezed from all directions."

Belfast Telegraph