Fall in UK manufacturing accelerates in August, but rate of US decline slows
A leading industry survey shows UK manufacturing slid further into recession during August 2001.
Published by the Chartered Institute of Purchasing and Supply, the August Purchasing Manager’s Index (PMI) paints a depressing picture of continued job losses, falling overseas demand and a spiralling loss of confidence in the sector.
During August, manufacturing output and the volume of new orders both recorded their sixth consecutive monthly fall, with the latter indicator declining faster than at any time since the beginning of 1999. Manufacturers' output prices also fell at their fastest rate since November 1999 while output declined more rapidly than it did in the previous month. Compared with a July index of 47.0, August’s index was 46.4 – where an index of above 50 indicates expansion and below 50 decline.
Though they were hardly unexpected, the figures nevertheless triggered a new round of calls for a further cut in interest rates. Economists fear that if manufacturing continues to decline at the current rate, overall unemployment figures may begin to rise. If this happens, pessimists say, consumer confidence and spending could be hit, thereby removing the main engine for growth that has so far kept the overall outlook positive.
However, there was brighter news from US where evidence surfaced that manufacturing might finally be turning the corner. (See leatherbiz.com story ‘US manufacturing shows signs of recovery 10.09.01)
