British Manufacturing Hit By Higher Costs, Slowing Demand

By Agence France-Presse Britain's manufacturing recovery stuttered in the third quarter, weighed down by a slowdown in demand and the surging cost of raw materials, the country's leading business grouping said Oct. 26. Manufacturers' orders and output growth was sluggish during the last three months, according to a quarterly industrial trends survey by the Confederation of British Industry (CBI). "Although orders and output have risen, the rate of increase is slow," says CBI's chief economic adviser, Ian McCafferty. "Manufacturers are cutting back on investment and jobs as they become less confident in the pace of recovery. Oil and commodity prices are damaging profitability and we expect this pressure on margins to be maintained." A total 31% of manufacturers reported higher orders in the last quarter while 27% reported a fall, the CBI survey showed. The balance of plus-4% compared with plus-2% in the previous quarter and plus-18% during the first three months of the year. Meanwhile output rose for the fourth successive quarter but growth was at its slowest rate in 2004. The CBI survey found that 28% of manufacturers reported higher output in the third quarter while 22% cited a fall, a balance of plus-6%. This compares with a balance of plus-7% in the quarter to July and plus-15% in the three months to April. The CBI said that while production was expected to hold up in the next quarter, new orders were set to grow at a much slower pace. Copyright Agence France-Presse, 2004

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