Weak Eurozone demand continues to plague fortunes of UK manufacturers - EY ITEM Club
1 May 2013
Nida Ali, economic advisor to the EY ITEM Club, comments on today’s lending figures:
- Manufacturing activity has flat-lined, but at least it is a step up from outright contraction
- ITEM Club is hopeful that the sector will contribute positively to growth in Q2
- But UK manufacturers are still vulnerable to a fragile global recovery
“Manufacturing activity has flat-lined, but at least it is a step up from outright contraction. The increase in new orders, particularly export orders, is an encouraging sign and suggests some improvement in output in the coming months.
“Based on the data in the Q1 GDP figures, manufacturing output increased strongly in March. If these survey results hold true, the manufacturing sector is in good shape to contribute positively to GDP growth in the second quarter.
“But weak Eurozone demand will continue to plague the fortunes of UK manufacturers and the underlying picture is still fragile. At the same time, faltering growth in emerging nations such as China and Brazil will constrain companies’ efforts to rebalance towards these markets. UK manufacturers aren’t out of the woods yet.