South 'struggling' in manufacturing sector

09-11-2006

South 'struggling' in manufacturing sector
Significant regional disparities are developing in the UK's manufacturing sector, according to the latest regional trends survey by the Confederation of British Industry (CBI).

The CBI survey reveals that while the sector's recovery continued in the north-west, Scotland and Yorkshire and Humber regions, where increases in orders were reported in the last three months, the south of England suffered from declining orders in the same period.

The west Midlands, Ireland and the south-west were also hit by falls in new orders, which commensurately impacted negatively on employment prospects throughout the country.

Despite the prosperity in the north of England, overall manufacturing output stagnated, leading CBI head of economic analysis Doug Godden to link employment pressures to faltering demand.

"What unites UK manufacturers is the higher costs they still face due to energy prices," Mr Godden said.

"The squeeze this puts on profits also adds to pressure on jobs, which are still being lost across the sector but especially in the south and east."

Financial analysts have warned that the UK's manufacturing sector, heavily reliant on exports to the eurozone and elsewhere abroad, could be severely damaged by the expected downturn in the US economy.

The CBI's assessment of manufacturing contrasts with that issued by the Chartered Institute of Purchasing and Supply (CIPS), issued last week, which claimed that the sector remained in "robust" health this autumn.


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