East Midlands manufacturing sector ‘heading for recession’
East Midlands manufacturers are seeing far more difficult trading conditions as they enter the Autumn as a survey shows the impact of the uncertainty of Brexit dragging on.
According to the Q3 Manufacturing Outlook survey published by Make UK, The Manufacturers’ Organisation and business advisory firm BDO, both output and total orders fell significantly compared to the second quarter.
Export orders also fell in the East Midlands despite a cheaper pound as overseas customers move away from British goods and the global slowdown and trade wars take effect.
Intentions to both recruit and invest were positive in the last quarter but, in line with the national picture, have now fallen, recruitment down by a balance of -21% which indicates a far more difficult labour market in the near future.
As a result of this mixed picture, Make UK is now forecasting manufacturing growth of just 0.1% in 2019 and an “anaemic” 0.6% in 2020. GDP is forecast at 1.2% in 2019 and 1.6% in 2020. GDP is forecast to be 1.1% in 2019 and 1.4% in 2020.
Charlotte Horobin, region director at Make UK in the East Midlands, said: “Industry is facing a perfect storm of factors, compounded by a hard Brexit which could not be coming at a worse possible time. In normal circumstances a global slowdown on its own would be enough, but add trade wars and the biggest shock to our economy since the War and there seems little doubt that, barring a remarkable turnaround, the sector is heading for recession.”
Jon Gilpin, head of manufacturing at BDO in the Midlands, said: “Global competition, skills shortages, lack of a coherent industrial strategy from government and continuing technological disruption has made UK manufacturing a challenging sector for decades. The long shadow cast by the possibilities of a no deal Brexit and the uncertainty of recent months has only added to the difficulties for manufacturers in the East Midlands.”
