UK manufacturing output fell sharply in September, according to official figures, while the global credit squeeze hit the services sector.
Output slid 0.6% on a monthly basis in September and was flat in the third quarter, held back by the strong pound, high interest rates and oil prices.
Services activity slowed to a 53-month low as the global lending crisis affected leading finance institutions.
One analyst said the data strengthened the case for an immediate cut in rates.
Last year, the T&G warned that 2029 was “Year Zero” for British manufacturing. That is when, on current job loss trends, we face wipe-out. We were criticised as doom-mongers.
Yet, in an array of bewilderingly mixed statistics, it is clear we are losing more than 100,000 manufacturing jobs a year. Worse still, from a strategic, economic view, they are not being replaced on a like-for-like basis.
There is no doubt manufacturers are having a tough time, in spite of the economic stability Labour has overseen. The effects of globalisation, coupled with higher energy costs – largely the result of suppliers’ and producers’ greed – are costing businesses dear. What we need, and what we’ll be calling for at this month’s TUC conference, is a much clearer and positive industrial strategy.
The Commons trade and industry select committee is holding an inquiry into the future of manufacturing in Britain. Many would wager that the conclusions will not make happy reading.
Manufacturing in Britain is fighting an uphill battle.
Not all of it all the time. But for most firms it is hard going. Manufacturing now accounts for less than 15% of the economy’s output – about half the size of the business and financial services sector and similar to distribution, hotels and catering.