Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Thursday, October 1, 1998 Published at 09:39 GMT 10:39 UK

Business: The Economy

UK exports in steep decline

Falling exports are harming UK manufacturers

The UK's manufacturing sector is falling deeper into recession, according to the latest survey of Purchasing Managers from the Chartered Institute of Purchasing and Supply (CIPS).

The news comes as another forecast, from Business Strategies, predicts 350,000 job losses in manufacturing in 1999.

The decline in export orders was the largest in the history of the CIPS survey, with the September PMI export orders index at 38.6. Any figure below 50 indicates a contraction.

Demand for orders in the Far East has continued to fall, while the problems in Russia put further pressure on exports.

Domestic orders also fell, because of the inflow of cheap imports and deteriorating consumer confidence, but the rate of decline eased.

The overall manufacturing sector index was negative for the sixth month in a row, but the September figure showed the decline was less steep, at 46.4, compared to 45.3 in August.

Jeremy Hawkins, of Bank of America, commented, that "this may help to boost speculation about a Bank of England rate cut next Thursday and make for a little added downside pressure on the pound," he said.

On the financial markets the pound fell to its lowest level against the Deutschmark since October last year.

Job losses mount Manufacturing employment also fell for the eighth month in a row, with 20% of firms reporting jobs losses, as opposed to 9% who took on more staff. The employment index was down to 44.4, as opposed to 45.2 in August.

And the economic consultancy Business Strategies has forecast 350,000 job losses in manufacturing next year.

It says the economy's growth rate will shrink to 0.7%, from 2.2% this year.

And it predicted unemployment would rise to 5.2% from the current level of 4.8%.

But the Northeast, West Midlands, and Yorkshire and Humberside will be in full-blown recession, with growth actually turning negative in those regions.

Business Strategies says that no region of the country will be immune, with weaker consumer spending hitting sectors like retailing and restaurants.

"Manufacturers are bearing the brunt of the economic difficulties, but consumers are getting frightened," commented research director Neil Blake.

Falls in equity prices and house prices will particularly affect consumers in the Southeast.

The consultancy said that the pound needed to be much lower against the Deutschmark, but warned that global turmoil could still derail growth.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Economy Contents

Relevant Stories

30 Sep 98 | The Economy
IMF warns UK on interest rates

25 Sep 98 | The Economy
Why unemployment has to rise

20 Sep 98 | The Economy
300,000 UK workers face axe

In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree