UK200Group members discuss the slowdown in UK manufacturing
Members of the UK200Group of independent accountancy and law firms have commented on new research from the Confederation of British Industry (CBI) which shows that the UK manufacturing sector is struggling.
The CBI’s new Industrial Trends Survey has shown that manufacturing production fell in the three months to October for the first time in two years, raising concerns of a slowdown in UK manufacturing.
Only 22% of the 463 manufacturers surveyed reported an increase in their new order book and only 20% of respondents said that their number of UK orders had gone up.
Things weren’t much better for foreign markets with only 15% of exporters reporting an increase in orders, against 33% experiencing a decrease.
This survey appears to be backed up by the last GDP data from the Office for National Statistics which show’s UK manufacturing output declined by 0.3% between July and September, part of an overall trend which has seen output in the sector decline by 0.9% this year.
Duncan Montgomery, tax partner at UK200Group member firm Whittingham Riddell, said:
“Manufacturing is crucial to many areas in Britain and we have some world class businesses both large and small. Keeping the pipeline of work full is crucial, and in each business keeping track not just of wins, but of tenders and projects lost and why is also crucial.
“Too many businesses put effort in to the wrong sales targets and need to either change focus, move into a new area of the market place, or properly record time on each tender so it can be valued. Certain areas of the economy are moving forward like construction, which usually bodes well for others with a six to twelve month time lag.”
Jonathan Russell, partner at UK200Group member firm ReesRussell, said:
“We worry about a slowdown in manufacturing but surely this should be expected when the World economy seems to be slowing. It is no good people going on about what can be done to assist manufacturing when the basic cause is a lack of demand.
“Unfortunately, our economic model is based upon the consumer and State consumption and both sectors in the UK have no money to spend and are actually trying to spend less than they earn – reduce their respective debt. This means that if UK manufacturing is going to grow then it needs to find markets outside of the UK and the economy there is slowing and most of the developed and developing countries have over capacity.
“Unless we have a fundamental change in our economic modelling we can but grow at a slow pace and the only change in the model which would improve manufacturing is if we had a value shift in mentality towards people who make things rather than those providing services.”