Posted By Paul Tate, August 02, 2011 at 10:33 AM, in Category: Global Value Networks
Back in March of this year, the UK’s Chancellor George Osborne ended his bullish budget speech in the British Parliament with the vision of, “Britain carried aloft by the march of the makers”, in which manufacturing would drive both economic growth and employment through the years ahead.
It may be time for a Plan B, it seems.
Figures just released by Markit and the UK’s Chartered Institute of Purchasing and Supply show that the UK’s manufacturing sector suddenly slumped into contraction last month – down to 49.1 on the July index, from 51.4 in June
A figure below 50 marks contraction. This is the first time this has happened since June 2009 when the country was in the midst of recession. Experts were expecting somewhere around 51.
Markit suggested new orders had fallen for the third month, and at the fastest rate since May 2009, reflecting low domestic demand.
The Confederation of British Industry (CBI) has now cut its UK growth forecast for 2011/12 to 1.3%, down from 1.7% earlier in the year. The manufacturing sector makes up around 13% of the U.K. economy.
With the slowing of manufacturing growth in many other European and some Asian nations recently, is this just a summer aberration in the UK, or is there worse yet to come this year from many of the world’s manufacturing leaders?
Written by Paul Tate
Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive