Industry keeps growing despite negative trends

Industry keeps growing despite negative trends
Melanie Reynolds The electronics industry continues to grow despite a downturn in prospects for the engineering industry as a whole. ‘The electronics industry is less bouyant than it was,’ said Alan Armitage, chief economist at the Engineering Employers Federation (EEF). ‘But in electronics the bad news tends to be that growth has slipped to only 4 per cent, but it’s still positive.’ All economic indicators are showing negative trends according to the EEF’s Business Trends survey for the first quarter of 1999. Engineering output continued to decline and is expected to fall by 1.2 per cent this year. Employment fell for the fourth successive quarter and 170,000 jobs are expected to be lost in 1999. Due to the skills shortage affecting the electronics industry, it is unlikely to suffer significant job losses, claimed the EEF. Other economic indicators include a fall in export orders for the ninth consecutive quarter while domestic order intake continues to weaken. The results are again blamed on the strength of the pound and interest rates. But indications are that the UK will avoid recession. The economic forecast by analyst Business Strategies suggests that although the economy will slow sharply with growth of 0.8 per cent, the country will avoid recession. ‘It will be weak but positive growth in the UK in 1999,’ said Business Strategies’ Dr Neil Blake. ‘We’re expecting positive investment and positive export growth. Sterling is bound to depreciate sooner or later.’ A reason for this optimism is due to strong growth in consumer confidence. Armitage pointed to mobile phone sales: ‘If people are expecting to be poorer in the future they might not spend ?100 on a phone.’ The findings back up confidence expressed by the Federation of Electronics Industry for the industry’s future.


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