Manufacturers have a bad month
Manufacturers continue to be buffeted by a struggling UK economy and the ongoing crisis in the eurozone.
“UK manufacturers have been buffeted by mounting economic uncertainty for much of the past year, reflected in extremely volatile indicators of trading conditions,” commented Lee Hopley, chief economist at EEF, the manufacturers’ organisation.
She was commenting on the big fall in manufacturing activity in May.
Official data in the Markit/CIPS manufacturing Purchasing Managers’ Index (PMI) indicated a sharp fall in manufacturing output.
It can be no consolation to the politicians that manufacturing currently represents little more than 10% of GDP.
Manufacturing is a strategically vital sector for the UK economy and its weakness in the face of global uncertainty must be a real concern.
It may also be the trigger for the Bank of England to restart its programme of quantitative easing to inject activity into the economy.
“The marked deterioration in European activity and confidence has hit home in May, with customers around the world taking a sharp pause of breath as eurozone events unfold,” said Hopley.
Hopley still believes there is some resilience in the local manufacturing sector, with longer term business from defence and aerospace providing a degree of business stability.
“It is a very varied and agile one and some sectors with longer order books and, a diversified customer base, will not necessarily recognise the declining trends indicated by the survey,” said Hopley.