Gloomy end to year for manufacturer businesses

MANUFACTURING firms are having a difficult end to the year amid “gathering gloom” from the global economy, it has been revealed.

A study by the EEF showed the industry had taken a step back in 2015, with concerns about weakening demand for goods from developed and emerging markets.

The manufacturers’ group said exports had deteriorated and job prospects had been hit, especially by the build-up of spare capacity in the oil and gas industry.

Recent job losses in steel companies had affected prospects for the metals sector.

The EEF has revised down its forecasts for manufacturing, expecting a 0.1% fall in 2015, recovering to 0.8% growth next year.

Chief economist Lee Hopley said: “The prospect of manufacturing contributing to growth in the UK economy this year has all but faded away with another disappointing set of indicators from our survey.

“The downbeat mood may not be universal across all industry sectors, but it certainly seems to be spreading as the challenges have mounted through this year – from the collapse in the oil price, slower world trade growth and weaker-than-expected construction activity.

“The fact that this is contributing to manufacturers pulling back their employment and investment plans adds to the concerns about the sector going into next year.

“While the Chancellor’s recent Spending Review will have been seen as supportive to industry, it is critical that the Government continues to act to ensure the UK is a competitive location for manufacturing.”

A Business Department spokesman said: ”The difficult conditions in the global economy affecting manufacturers and others makes it more important than ever that we stick to our long term economic plan for sustainable growth.

“This includes cutting red tape by a further £10bn, boosting skills by creating three million apprenticeships and reducing corporation tax.

“Manufacturing is a vital sector, contributing £170bn to the UK economy, and we will continue to work closely with industry.”