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UK manufacturing suffers worst run for 28 years

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Date: Tuesday 07 Oct 2008

LONDON (ShareCast) - Manufacturing output tumbled for the sixth month in a row during August, marking the worst run since 1980, according to a new report out today.

Data from the Office for National Statistics showed output dropped 0.4% between July and August, taking the annual fall to 1.9%.

“Manufacturers are being hit hard by muted domestic demand, weakening activity in key export markets, elevated input costs and tight credit conditions,” said Howard Archer, chief UK economist at Global Insight.

The benefit of a significantly weaker pound is being cancelled by weak domestic demand in key export markets, notably the Eurozone and the US.

“Furthermore, the likely marked dampening impact on the UK and global economies stemming from the heightened financial sector turmoil can only add to manufacturers' problems.”

The decreases were widespread, said the ONS, although activity within the transport equipment industries, which includes car makers, slipped 2.3%.

Meanwhile, industrial production tumbled 0.6% in August, worse than the 0.2% predicted by analysts and down on the previous month’s 0.4% drop. Lower output from utilities and oil and gas extraction were blamed.

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